Saudi Arabia unveils plan to wean economy off oil
Unable to sell large amounts of debt domestically, Riyadh is reportedly looking to raise up to $15 billion from international investors. It is the largest issue of international debt since Argentina’s $16.5 billion bond sale earlier this year.“They’ll come to market and they will come in a big way. They need to fill a big funding gap and there’s a limit to how much they can raise domestically,” said Hani Ibrahim, head of debt capital markets at Qatari investment bank QInvest, as quoted by Reuters.READ MORE: Riyadh to tap global bond markets to balance budgetExperts expect a high demand for the Saudi dollar-denominated obligations following the strong buying of other emerging market debt such as Qatar, Mexico and Argentina.Investors reportedly expect Saudi bonds to be issued with a yield anywhere between 160 and 200 basis points over equivalent US government benchmarks and split into five, ten and 30-year maturities.Riyadh’s first international bond sale is part of the kingdom’s plan to plug the growing budget deficit following the sharp drop in crude prices from $115 to $50 per barrel.
OttLegalRebels: RT residualbitcoin: Saudis to invest in $100bn tech fund #fintech #venturecapital #vc #startups https://t.co/5CaluM5GJI …— Tech Guard Solutions October 17, 2016
To deal with the growing deficit, the kingdom had to burn through reserves and introduce austerity measures. They include cuts in subsidies and government spending, and the introduction of new levies.According to S P, the six economies that make up the Gulf Cooperation Council, which includes Saudi Arabia, will need to borrow a combined $560 billion over the next four years to plug budget… #Saudi Arabia cuts European #crude prices in increased competition with #Iran https://t.co/O118pdUjNA — Peter Ernest June 6, 2016