Kingdom of Saudi Arabia $17.5 billion three tranche sovereign bond issue

Overview:

• The Government of Saudi Arabia issued its debut sovereign bond, selling $17.5 billion in three tranches as it raised funds to fill its budget deficit - forecast to be $53 billion in 2017 - caused by the low oil price. 
• The bond was the largest ever sold by an emerging market, eclipsing Argentina's $16.5 billion issue in April 2016, and Saudi Arabia's first international dollar-denominated issue. 
• The three tranches, which were listed on the Irish Stock Exchange, were $5.5 billion 2.375% notes due 2021, $5.5 billion 3.25% notes due 2026, and $6.5 billion 4.5% notes due 2046.
• The depressed oil price has driven a number of Middle East countries reliant on hydrocarbon revenue to the international debt markets to fill gaps in budgets; other issues in 2016 included Qatar's $9 billion eurobond and Bahrain's $3 billion in conventional and Islamic debt. 
• Citi, HSBC and JPMorgan, Bank of China, BNP Paribas, Deutsche Bank, Goldman Sachs, Morgan Stanley, Mitsubishi UFJ, and NCB Capital were bookrunners on Saudi Arabia's bond. 

Ben Naylor - Regional editor

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