Saudi Arabia has raised three billion euros from over 14.5 billion worth of orders for its first bond denominated in euros, as the kingdom taps new financing sources to cover its budgetary needs in an era of lower oil prices.
With this deal, the Saudis have sold over $60 billion in international bonds since their debut as a global borrower in late 2016, making the kingdom one of the biggest debt issuers among emerging markets.
Its foray in the euro debt market - the first by a Gulf government - will allow it in the future to tap different investors at different times.
The Saudi bonds are split into a 1 billion-euro eight-year tranche and a 2 billion-euro 20-year tranche, a document issued by one of the banks leading the deal showed.
“Saudi Arabia will benefit from strong tailwinds as there’s good demand for euro-denominated paper driven by European investors looking for alternatives to very low yields in government bonds in Europe,” Marcelo Assalin, head of emerging market debt at NN Investment Partners, a Netherlands-based asset manager, said while the deal was being marketed.
The eight-year tranche carries a coupon of 0.75 percent, the longer-dated bond two percent. After pricing, the eight-year tranche offered a 0.782 percent yield, the 20-year notes 2.042 percent, according to the document.