A document stated that Saudi Arabia started today, Wednesday, the marketing of a dollar bond operation on three tranches, at a time when the largest oil exporter in the world is seeking to re-supply its government coffers with funds, after it was damaged by low oil prices and expectations to reduce production.
The kingdom markets through the Ministry of Finance five and a half years papers at about 315 basis points over US treasury bonds, ten and a half years bonds at about 325 basis points, and forty-year bonds at about 5.15%.
The size of the deal will depend on the market's turnout, but bankers and fund managers say they expect a multi-billion dollar process.
A number of banks - including City Goldman Sachs and HSBC - have been appointed to monitor the debt sale process, which is scheduled to close later in the day.
Riyadh raised the debt ceiling to 50% of GDP from a previous level at 30% last March, as it plans to increase borrowing to compensate for the decline in oil revenues in light of the economic slowdown caused by the spread of the Corona crisis.
The issuance of these bonds comes at a time when Qatar and Abu Dhabi successfully sold bonds with a combined value of $ 17 billion last week.
And last Wednesday, the Qatari Ministry of Finance announced the issuance of international bonds denominated in US $ 10 billion.
The Saudi issuance also comes after a historic agreement signed last Sunday to reduce oil production between two major producers, which will contribute to achieving stability in the oil market, but it is expected to place additional pressure on Riyadh's revenues this year.
The benchmarks Brent and West Texas, including sharp losses yesterday, Tuesday, due to fears that the record cut in global production will not compensate for the collapse in demand for fuel due to efforts to contain the Corona virus, but prices recovered slightly in morning dealings today, Wednesday.
Brent crude futures rose, or 0.8% in early trade, to reach $ 29.84 a barrel, after falling 6.7% in the previous session.
US West Texas Intermediate crude increased 1.9% to $ 20.49 in early trade, after tumbling 10.3% in the previous session.