Saudi Arabia issued $2.5 billion Sukuk as the world’s biggest oil exporter takes advantage of borrowing costs that are around the lowest in four years, reported Bloomberg.
The Kingdom set initial price guidance for a 10-year Sukuk at between 145 basis points and 150 basis points over the benchmark midswap rate. Saudi Arabia’s $4 billion of securities due in April 2029 closed at a spread of 125 basis points on 21 October 2019.
The issuance comes less than a week after oil giant Saudi Aramco delayed its planned initial public offering, following the 14 September 2019 drone strikes on the state-owned energy company’s key oil facilities, which briefly halved its output.
The Kingdom has already raised $10.9 billion of Eurobonds this year, and the new deal will complete its funding requirements on international markets.
Saudi Arabia planned to issue about $32 billion in local—and foreign-currency debt this year to fund its budget deficit.
JPMorgan Chase & Co., Standard Chartered and Aljazira Capital are managing the Sukuk issuance.
Saudi Arabia is preparing to host international investors next week for its Future Investment Initiative—an annual festival to showcase the Kingdom’s aspirations and which has been dubbed Davos in the Desert.