Saudi Arabia is planning to invite bids for $10bn worth of international bonds after September, Bloomberg has reported.
This will be Saudi Arabia’s first international bond issue.
The borrowing will be the largest by a Middle East sovereign in the region’s history. It reflects Saudi Arabia’s decision to finance its budget deficit through the banking market rather than drawing down further on its savings.
There will be roadshow around the end of September and pricing and other terms will be fixed in early October, Bloomberg has reported.
“This is going to be a real test,” Bloomberg reporter Matthew Martin said. “Saudi Arabia (has) got a very challenged story with the oil price environment.”
Saudi Arabia has appointed JPMorgan Chase & Company, HSBC Holdings Plc and Citigroup to arrange the sale.
Sovereigns including Bahrain, Kuwait and Egypt and other corporates are looking to raise money to finance the funding gap brought about by the weaker oil price, Martin said.