IFM Correspondent

October 19, 2016: Saudi Arabia has officially launched its first international bond sale. The move comes as the Kingdom looks to debt markets to help ease its cash squeeze as a result of the two-year oil price slump. The low oil price has led to a huge debt for Saudi Arabia, which is battling widespread job cuts, loss of projects and slow economic growth.

The sale has officially started with the Kingdom aiming to raise $10 to $15 billion in three offerings — five-year, 10-year and 30-year bonds. The government aims to sell dollar-denominated bonds due in five years for a spread of 160 basis points, 10-year notes at 185 basis points and 30-year securities at 235 basis points. This is much higher than similar bonds issued by Qatar.

Saudi Arabia has for years run its economy based on export of oil but was last year facing a budget deficit of up to $97 billion.

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