By Mohammed Abu Meleeh
Riyadh-Mubasher: Saudi Arabia’s government bond market came alive after an eight-year interlude.
The kingdom, home to the world’s second-biggest oil reserves and Islam’s holiest sites, sold on Monday five-year debt with a coupon of 1.92%, seven-year notes at 2.34%, and 10-year securities at 2.65%, Bloomberg reported citing sources familiar with the matter.
The government has not unveiled the issuance value.
Al-Arabiya TV reported that the kingdom could raise up to SAR 20 billion ($5.33 billion) from bonds, and the government would allow commercial banks to participate in the offering.
This would be the first time the government allow commercial banks to participate in such offerings since its return to the debt market.
Last month, the government issued bonds worth SAR 15 billion only to quasi-government funds.
Financial Times earlier reported that the kingdom plans to return to the bond market to raise $27 billion by the end of 2015, in order to avoid the impact of falling oil prices.
Fahad Al-Mubarak, governor of the Saudi Arabian Monetary Agency (SAMA), said Riyadh had already issued its first $4 billion in local bonds, the first sovereign issuance since 2007.
Saudi oil minister Ali Al-Naimi said in December that the government could tap the debt market, adding “a deficit will occur, but we have no debt. We can go to the banks. They are full. We can go and borrow money and keep our reserves. Or we can use some of our reserves.”
Translated by Abdul Maguid Aboshahla
