Saudi Arabia sells $5bln in first bond deal in almost a year

Saudi Arabia sells $5bln in first bond deal in almost a year

DUBAI: Saudi Arabia sold on Tuesday $5 billion in Islamic and conventional bonds for which demand topped $26.5 billion as it held its first international bond sale in almost a year.

The top oil exporter's first bond sale since November came amid turbulent markets and heightened tensions with Washington over an OPEC+ oil production cut, as Riyadh gears up to host its annual investment conference next week.

The kingdom sold $2.5 billion in six-year sukuk at 105 basis points (bps) over U.S. Treasuries (UST) and $2.5 billion in 10-year bonds at 150 bps over UST, a bank document showed.

That was tightened from initial guidance of around 135 basis points (bps) over U.S. Treasuries (UST) for the sukuk and around 180 bps over UST for the 10-year tranche.

"There has been very little Gulf sovereign issuance this year and the market sees it as a pretty safe bet when there is a lot of uncertainty elsewhere in the EM space," said Justin Alexander, director of Khalij Economics and Gulf analyst for GlobalSource Partners.

"Saudi is a fairly logical substitute for Russia and its weight in indices such as the JPMGBI (JPMorgan Government Bond Index) has been growing."

Dino Kronfol, Franklin Templeton's chief investment officer for global