Saudi Arabia turns to Euro-bond amid near record-low yields

Saudi Arabia turns to Euro-bond amid near record-low yields

Saudi Arabia is tapping international bond markets for the second straight month, marketing euro-denominated debt to take advantage of ultra-low borrowing costs and help reduce its reliance on dollar debt.

The world's largest crude exporter is planning a two-part, benchmark-sized deal with a three-year and nine-year offering, according to a person familiar with the matter, who asked not to be identified because they're not authorised to speak publicly. Saudi Arabia raised $5bn from a two-part dollar-bond offering in January.

The kingdom has picked BNP Paribas, Goldman Sachs Group Inc. and HSBC Holdings as global coordinators, and Citigroup, JPMorgan Chase & Co, Standard Chartered and Samba Capital as passive joint bookrunners to organise a global investor call on Tuesday.

A potential sale comes at a time when the recovery in Brent crude prices has eased fiscal pressures in the region. The oil price is still well below what most of the Gulf economies need to balance their budgets.

"The yields will probably be particularly low, sub 1 per cent, and it makes sense for them to try and diversify their funding a little,“ said Richard Briggs, a money manager at GAM Holdings in London. "Things have been marginally weaker in emerging-market credit over the