Saudi Arabia returns to dollar-debt market to boost finances

Saudi Arabia returns to dollar-debt market to boost finances

Saudi Arabia sold a two-part dollar bond as countries in the Gulf Arab region raise cash buffers to weather low oil prices and the coronavirus pandemic.

The world's largest crude exporter priced $5bn in bonds on Tuesday, according to a person familiar with the matter, who asked not to be named.

The $2.75bn 12-year notes were priced at 130 basis points over 10-year US Treasuries, compared with guidance of 140 basis points and initial price talk of 165, according to the person familiar

The $2.25bn 40-year security were priced at 3.45 per cent, versus guidance in the 3.55 per cent area and initial price talk of 3.75 per cent

The yield on its debt due 2060 was at 3.46 per cent at 4pm in New York

Even before the kingdom's offering, the Gulf Arab region was already seeing the busiest start to the year since 2019 for bond sales, with Oman and Bahrain raising a combined $5.25bn this month.

The price of Brent crude is still below what most of the region's economies need to balance their budgets. Saudi Arabia's dollar bonds have lost 1 per cent since the start of year, making them the worst performer among Gulf Arab peers.

"Coming into January, the entire