Arab News, Wed, May 29, 2024 | Dhu al-Qadah 21, 1445
Saudi Arabia begins sale of triple-tranche sukuk
Saudi Arabia:
Saudi Arabia has started selling its triple-tranche benchmark-sized Islamic
bonds, or sukuk, with tenors of 3, 6 and 10 years, fixed-income news service IFR
reported on Tuesday.
Initial guidance has been placed around 85 basis
points over US Treasuries for the three-year sukuk, 100 bps over UST for the
6-year portion, and 110 bps for the 10-year tranche, said IFR.
Benchmark-sized is typically understood to mean at
least $500 million. Pricing is expected on Tuesday.
The Kingdom is facing a projected budget deficit
of SR79 billion this year amid lower oil revenue mainly due to voluntary output
cuts as per OPEC+ policy, and increased spending to bolster non-oil growth and
meet objectives of its Vision 2030 economic transformation plan.
On Friday, ratings agency Moody’s upgraded Saudi
Arabia's local and foreign currency rating to Aa1 from Aa2, citing increased
predictability of the government’s decision-making processes affecting the
private sector.
BNP Paribas, Citi and Goldman Sachs International
have been appointed as global coordinators and joint book-runners to manage the
debt sale.
Aljazira Capital, HSBC Bank, JPMorgan and Standard
Chartered have been selected as the passive joint lead managers and book-runners
on the offering, IFR said.
Saudi Arabia’s last bond issue in January saw the
Kingdom issue dollar-denominated bonds worth $12 billion.