Saudi to offer about 20bn riyal bonds to banks

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RIYADH, July 20, (RTRS): Saudi Arabia’s government has contacted banks to sell them about 20 billion riyals ($5.3 billion) of bonds in its domestic debt sale this month, the Maaal financial website reported on Wednesday, quoting unnamed sources. Since last August, the government has been selling around 20 billion riyals of domestic bonds to banks every month to fund a budget deficit caused by low oil prices.

In the last few months it has also started borrowing abroad. It raised a $10 billion international loan in late April and plans a US dollar bond issue in coming weeks or months. This month’s domestic debt sale will comprise five-, seven- and 10- year bonds in fixed- and floating-rate tranches, Maaal said.

The fixed-rate bonds would be offered at 62-67 basis points above US Treasuries for the five-year tranche, 74-79 bps over for seven years and 87-92 bps over for 10 years. Those ranges are 2 bps above levels offered in last month’s sale.

The floating-rate bonds would be offered at 25-30 bps below the threemonth Saudi interbank offered rate for five years, 10-15 bps below for seven years and fl at to 5 bps above for 10 years — the same ranges as those in June’s offer. The finance ministry did not respond to a phone call seeking comment.

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