Saudi Arabia raises $5 billion through dual-tranche bonds

Saudi Arabia raises $5 billion through dual-tranche bonds

Saudi Arabia raises $5 billion through dual-tranche bonds

an hour ago

A money changer displays Saudi riyal banknotes at a currency exchange in Riyadh, Saudi Arabia.

Saudi Arabia raised $5 billion in a dual-tranche bond sale with tenors of 12 and 40 years, a document showed, as it seeks to plug a large fiscal deficit.

The kingdom sold $2.75 billion in 12-year bonds at 130 basis points (bps) over 10-year US Treasuries and $2.25 billion in 40-year notes at 3.45 per cent, 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 12-year paper was trading up by 0.2 per cent on Wednesday after pricing just below par late on Tuesday, he said, in a sign that the final allocations left