Saudi Arabia issued $17.5bln of USD denominated sovereign bonds – the largest issue ever
- Saudi Aramco may float 5% of their business in the largest IPO ever
- The TASI stock index is down more than 50% from its 2014 high
- OPEC agreed to cut output by 640,000 to 1,140,000 bpd
The sovereign bond issue
The Saudi Arabia’s first international bond deal raised $17.5bln. They tapped the market across the yield curve issuing 5 yr, 10 yr and 30 yr bonds. The auction was a success - international investors, mostly from the US, placed $67bln of bids. The issues were priced slightly higher than Qatar, which raised $9bln in May, and Abu Dhabi, which issued $2.5bln each of 5yr and 10yr paper in April.
The Saudi issue appears to have been priced to go, as the table below, showing the basis point spread over US Treasuries, indicates. According to the prospectus the Kingdom of Saudi Arabia (KSA) want to tap the USD sovereign bond market extensively in the future, raising as much as $120bln; attracting investors has therefore been a critical aspect of their recent charm offensive:
To read the entire report, please click on the pdf file below: