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Huge International Demand for Saudi Government Bonds

Huge International Demand for Saudi Government Bonds

Friday, 11 January, 2019 - 13:15
Riyadh - Shujaa al-Bogmi
The Saudi Finance Ministry announced Thursday pricing its fourth international bond, attracting massive orders- three and a half folds its value.

The ministry confirmed in a statement the completion of the $7.5 billion bond sale. “The issuance received significant interest from international investors, with the orderbook peaking at $27.5 billion,” it said.

The country is rated A1 by Moody's and A+ by Fitch.

The strong response to the Saudi government bonds reflects the high confidence in the country’s economy. It also shows the investors’ trust in economic reforms the kingdom is working on.

Saudi Arabia has become one of the biggest emerging market issuers, having sold $52 billion in international bonds since its debut in 2016. It plans to boost borrowing this year, along with state spending.

The Kingdom’s 2019 budget revealed a record spending worth SAR1.106 trillion ($295 billion) which is a 7 percent growth rate compared to 2018. According to the figures, the expected revenues in 2019 are estimated at SAR975 billion ($260 billion) with a nine percent growth rate compared to last year.

The budget has proven the solidity of the country’s economy in which the announced figures showed a rise in the spending volume, going in tandem with Saudi Vision 2030 and related national programs.

Saudi Vision 2030 aims at diversifying the economy and achieving stability, economic and financial sustainability, as well as stimulating the private sector and improving the living standards of citizens.

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