RIYADH: Saudi Arabia issued a $12 billion triple-tranche bond under its Global Medium-Term Note Issuance Program, attracting strong investor demand with a total order book of $37 billion.
The offering, issued by the National Debt Management Center, was oversubscribed threefold and included three tranches: a $5 billion three-year bond maturing in 2028, a $3 billion six-year bond maturing in 2031, and a $4 billion 10-year bond maturing in 2035.
The NDMC said the transaction is part of its strategy to diversify the Kingdom’s investor base and meet its financing needs efficiently through international debt capital markets.
The high level of demand reflects investor confidence in Saudi Arabia’s economic strength and its long-term investment opportunities.
This issuance is part of Saudi Arabia’s broader fiscal strategy. Earlier this month, the NDMC unveiled the Kingdom’s annual borrowing plan, targeting approximately SR139 billion ($37 billion) in funding.
The plan aims to address an anticipated budget deficit of SR101 billion and refinance SR38 billion in maturing debt, reflecting Saudi Arabia’s commitment to fiscal stability as it continues its economic transformation under Vision 2030.
As part of the borrowing plan, the NDMC has been marketing international bonds in multiple tranches, with proceeds intended to cover the budget shortfall and service existing debt.
Pricing for these bonds has been benchmarked against US Treasury bonds, showcasing Saudi Arabia’s strategic approach to accessing global debt markets.
The NDMC has also been exploring diverse funding sources to support the Kingdom’s fiscal objectives.
In December, it secured a $2.5 billion Shariah-compliant revolving credit facility with a three-year tenure, arranged with both regional and international financial institutions.
This facility aligns with the NDMC’s medium-term debt strategy, aimed at diversifying funding channels while supporting Saudi Arabia’s economic growth agenda.
In January 2024, the NDMC had projected the Kingdom’s total debt portfolio to reach SR1.115 trillion by the end of the year, with financing focused on servicing debt maturities and addressing the 2024 budget deficit.
In the first half of 2024, Saudi Arabia emerged as the largest dollar debt issuer among emerging markets, excluding China, and the leading global issuer of sukuk, according to Fitch Ratings.
This surge is attributed to substantial issuances in the first half of 2024, driven by the government’s funding needs and strategic economic projects.
Fitch Ratings projected a significant increase in dollar-denominated debt issuance by Saudi Arabia in 2025 as oil revenues moderate.
The Kingdom’s debt capital market is expected to surpass $500 billion in outstanding debt in the medium term, driven by the financing of government giga-projects under Vision 2030, deficit funding, economic diversification efforts, and ongoing structural reforms.
