By Archana Narayanan
Saudi Arabia beat estranged neighbor Qatar to the bond market, raising $11 billion in the biggest dollar sale by an emerging-market sovereign this year.
It moved quickly to sell the bonds without a roadshow, while Qatar, which is being boycotted by the kingdom and other Gulf states, is meeting investors in the U.S. and U.K. this week ahead of a possible offering.
Here’s a breakdown of what Saudi Arabia sold:
- $4.5 billion worth of bonds due in 2025 at 140 basis points over similar-maturity U.S. Treasuries
- $3 billion of notes maturing in 2030 at a spread of 175 basis points
- $3.5 billion of 2049 bonds at 210 basis points over the similar benchmark
Saudi Arabia’s sale, which eclipsed Argentina’s $9 billion offering in January, received more than $50 billion in bids, including interest from joint lead managers, three people familiar with the deal said, declining to be identified because the information is private.
The nation has been one of the biggest issuers in emerging markets since a plunge in oil prices prompted the kingdom to sell dollar bonds less than two years ago. With this week’s offering, Saudi Arabia has raised a total of $50 billion since the end of 2016, according to data compiled by Bloomberg.
The sale was completed as Crown Prince Mohammed bin Salman visited officials in France after a three-week tour of the U.S. to drum up business. His trip, as well as Brent crude prices of about $70 a barrel, has helped investors move on from the shock of a corruption crackdown that led to the arrest of high profile princes and billionaires in November.
“Saudi has re-gained the market’s confidence,” Shahzad Hasan, an emerging-market debt manager at Allianz Global Investors, which has $612 billion under management, said before the sale. “The resilience in oil is playing an important role in that and the crown prince’s tour of the western economies was a positive factor as it sent the right message to foreign investors.”
The nation plans to borrow the equivalent of $31 billion this year to bridge an expected budget deficit of $52 billion and fund growth plans after its economy shrank last year. Last month, it increased a $10 billion syndicated loan by $6 billion.
Citigroup Inc., GIB Capital, Goldman Sachs Group Inc., HSBC Holdings Plc and Morgan Stanley were joint global coordinators on the deal. Bank of China, Industrial & Commercial Bank of China Ltd., JPMorgan Chase & Co. and Mitsubishi UFJ Financial Group were joint leader managers.