Saudi Arabia prepares for bond sale to ease financial squeeze from cheap crude
According to Bloomberg quoting sources in the government, the Saudis plan to sell dollar-denominated bonds due in five years for about 140 basis points more than similarly maturing US Treasuries, 10-year bonds at a spread of about 170 basis points and 30-year securities at 215 basis points.The Financial Times said the yields will be 2.63 percent, 3.44 percent and 4.64 percent, respectively. The original guidance stipulated 10-year bonds to be sold at 3.6 percent.The demand for Saudi bonds much exceeded the offer. Investors had applied for $67 billion for the Kingdom’s first international bond sale.Saudi Arabia saw a record $98 billion budget deficit last year, or 15 percent of GDP, and is struggling to cut the gap this year. The country plans to use the money raised in the bond sale to cut the deficit, easing pressure on burning through its foreign reserves.As of late August, Saudi Arabia’s reserves stood at $555 billion, down $6 billion from the month before and at the lowest level since 2012. The holdings peaked in August 2014 at $737 billion… From $70bn to $20bn: Saudi Arabia to slash capital spending https://t.co/SzgXYxAjnG — RT 12 октября 2016 г.