Saudi Arabia raises $5.5bln via dual-tranche bonds

Saudi Arabia raises $5.5bln via dual-tranche bonds

DUBAI: Saudi Arabia launched $5.5 billion in a dual-tranche bond sale on Tuesday with tenors of 12 and 40 years, a document showed, as it seeks to plug a large fiscal deficit.The world's top oil exporter has taken a severe blow from the pandemic, which, along with an oil price war between Saudi Arabia and Russia last year, sent oil prices tumbling.The kingdom sold the 12-year bonds at 130 basis points (bps) over 10-year U.S. Treasuries and the 40-year notes at 3.45%, the document from one of the banks on the deal showed. It tightened the 12-year tranche by 35 bps and the 40-year by 30 bps from initial price guidance.It drew more than $13 billion in orders for the 12-year bonds and over $9 billion in orders for the 40-year paper."The final pricing is in line with the sovereign curve and the high order book shows robust investor appetite for the region's debt markets. This is sure to be the first of many deals by the kingdom this year," a fixed-income strategist said.The government expects to post a fiscal deficit of 141 billion riyals ($37.59 billion), or 4.9% of gross domestic product, this year after an expected deficit of