(Jan 6): Saudi Arabia raised US$11.5 billion through a dollar bond sale as it taps global markets to help fund huge projects aimed at reducing its economic dependence on oil.
The four-part offering, priced Monday (Jan 5) with maturities ranging from three to 30 years, attracted more than US$29 billion of bids at its peak, according to a person with direct knowledge of the matter. Demand later dropped to just under US$28 billion, the person said.
The strong demand means the kingdom can offer a smaller spread over US Treasuries than initially indicated. The longest part of the deal, a US$3.5 billion bond maturing in 2056, will pay 1.1 percentage points above Treasuries, according to the person. That’s 30 basis points less than the initial pricing discussions.
Earlier this month, the Ministry of Finance approved borrowing plans that imply about US$14 billion to US$17 billion of issuance in international bond markets this year. At the upper end, that would be below 2025 levels, while the lower end would mark the smallest amount since 2022.
Still, Saudi Arabia has a history of overshooting its funding targets. Goldman Sachs Group Inc has predicted the Saudis will issue a record US$25 billion of international debt this year and sees the country’s fiscal deficit at 6% of gross domestic product, far higher than the government’s target of 3.3%.
Saudi Arabia’s Ministry of Finance closed a US$13 billion dollar loan late last year. The proceeds will be used for infrastructure projects and the facility carries a seven-year tenor. The loan was heavily marketed to Chinese banks, according to people familiar with the matter.
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The loan deal was the latest in a series of transactions that have seen Saudi Arabia tap the Asian market for liquidity to diversify its funding sources. Asian banks are keen to lend amid a shortage of transactions at home. Loan volumes in Asia, excluding Japan, in dollars, euros and yen fell to a five-year low in 2025, according to data compiled by Bloomberg.
Saudi Arabia’s bond on Monday also included debt maturing in three, five and 10 years.
Demand was strongest at the long end, with the 30-year bond attracting more than US$8.1 billion of orders at its peak, the person said. The 10-year has drawn over US$7.9 billion, the five-year more than US$6.5 billion and the three-year over US$5.2 billion.
Uploaded by Arion Yeow
