The Clap
Saudi Arabia will issue a tender to buy back bonds with entitlements until 2026 for $15.5 billion.
The Deets
A disclosure to the London Stock Exchange showed that KSA made an offer to holders of existing bonds to buy them for cash and added that it may issue new bonds.
Bonds
The Ministry of Finance invited holders of bonds due in 2023 ($3 billion), bonds due in April 2025 ($4.5 billion), bonds maturing in October 2025 ($2.5 billion), and bonds due in 2026 ($5.5 billion).
Why this Matters
Bonds issued by Gulf countries outperformed their peers in emerging markets, as the increase in oil prices strengthened their financial conditions and current accounts.
Investors are also drawn to more highly-rated debt amid growing fears of a global recession.
Moody’s rates Saudi Arabia’s debt at “A1”, which is the fourth highest score for investment worthiness.
What Now
The ministry intends to issue a series of new dollar-denominated bonds at a fixed interest rate as part of its global medium-term securities program.
It also plans to issue new dollar-denominated Sukuk, depending on market conditions.
