Saudi to issue about 20bn riyals of local bonds – Bid to fund budget deficit

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DUBAI, June 21, (RTRS): Saudi Arabia’s government will sell about 20 billion riyals ($5.3 billion) of domestic bonds to banks next Monday, the Maaal financial website quoted official sources as saying on Tuesday.

Since last August, the government has been selling about 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 last month 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 60-65 basis points above US Treasuries for the five-year tranche, 72-77 bps over for seven years and 85-90 bps over for 10 years.

The floating-rate bonds would be offered at 25 to 30 bps below the three-month Saudi interbank offered rate for five years, 10 to 15 bps below for seven years and flat to 5 bps above for 10 years.

The finance ministry did not respond to a phone call seeking comment.

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