Kingdom eyes $15b bond sales in 2016

DUBAI/RIYADH — Saudi Arabia is considering the sale of as much as $15 billion of bonds this year, including a $10 billion issue that could come as soon as the end of Ramadan in July, according to reports. Bloomberg cited sources as saying the kingdom had been encouraged by Qatar’s record issue last week, and was weighing the sale of at least $10 billion in five-, 10- and 30-year bonds in July. Talks were described as being at a preliminary stage and the Financial Times said the Ministry of Finance was lining up a “beauty parade” of lenders on June 6-7 to hear proposals on how to organize the bond. Banks expected to take part include the lead lenders on the kingdom’s $10 billion loan in April Bank of Tokyo-Mitsubishi, HSBC and JPMorgan Chase, according to the FT. Others deemed likely to take part include BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs and Morgan Stanley, with plans to shortlist lead and second-tier arrangers expected as early as mid-June. Gulf Cooperation Council governments have been active in the bond market this year following a dip in oil revenues. The Middle East’s largest ever sale, a $9 billion bond from Qatar, attracted $23 billion in orders last week and Abu Dhabi raised $5 billion from the sale of five- and 10-year securities in April. Dubai is also said to be preparing its own issue and Oman announced plans to issue bonds on Wednesday. Saudi Arabia’s plans come as the kingdom embarks on a diversification drive. Bloomberg reported Tuesday that the kingdom had hired HSBC Holdings banker Fahad Al Saif to start a debt management office on an open-ended secondment from Saudi British Bank to manage its issuance plans. — Agencies