BUSINESS

Saudi Arabia raises $4.53bn in oversubscribed bond issue

July 26, 2017

RIYADH — Saudi Arabia has raised $4.53 billion from a local Islamic bond issue that was three times oversubscribed, it said Tuesday as it battles a budget deficit caused by low oil revenues.

The finance ministry said orders exceeded 52 billion riyals ($13.6 billion) for its first issue of domestic sukuk bonds worth 17 billion riyals.

It said the new bonds would be divided into three tranches, with maturities ranging from five to ten years.

"The strong demand for local bonds reflects the confidence of investors in the kingdom's issuings and confirms the strength of the Saudi economy's foundations," the ministry said in a statement.

In April Saudi Arabia raised $9 billion in its first global Islamic bond issue, a move analysts said could ease pressure on its foreign reserves.

But the largest Arab economy is suffering from a sharp slide in oil revenues since crude prices plummeted in mid-2014, forcing Riyadh to cut subsidies and delay projects.

The kingdom forecast a budget deficit of $53 billion this financial year, down slightly from last year's shortfall.

Economic growth in Saudi Arabia is expected to hit just 0.1 percent this year, the International Monetary Fund said Tuesday, down from the 0.3 percent it projected in April.

That would be the country's worst growth since 2009, when its economy contracted by 2.0 percent as oil revenues slumped following the global financial crisis. — AFP


July 26, 2017
171 views
HIGHLIGHTS
BUSINESS
7 hours ago

Prince Bader and Ammar Altaf open the sixth edition of Automechanika Riyadh

BUSINESS
day ago

Infinix GT 20 Pro flagship launch: Revolutionizing esports-level gaming and ushering in a new era of the holistic gaming universe

BUSINESS
day ago

Saudi Electricity Company gains regulatory approval for increased weighted average cost of capital