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The Saudi bid breaks expectations despite oil attacks



A $ 2.5 billion Islamic bond in Saudi Arabia issued on Tuesday drew orders worth more than $ 13 billion in the first issue of an international debt since attacks on vital Saudi oil facilities in mid-September.

On Tuesday, Saudi Arabia sold $ 2.5 billion, or sukuk, Islamic bonds, returning to the bond market to take advantage of low borrowing costs, hoping to replenish its treasury bills because of persistently low prices. reduce oil revenues.

The 10-year bond was priced at 127 basis points against the gauge petrol, a decrease of 145-150 basis points above the mid-term rate as a result of high demand, reports Bloomberg.

Investor demand for Saudi Arabia's Islamic connection was high, even after the Sept. 14 attacks on critical oil infrastructure that dampened more than half of Saudi Africa's oil supply.

In recent years, the Kingdom has borrowed a lot of money on international bond markets to offset lower government oil revenues, on the back of low oil prices.

In July this year, the Saudis issued a $ 3.3 billion (3 billion euro) Eurobond debit. Since its first entry into international bond markets at the end of 2016, the Kingdom has raised as much as $ 60 billion in international bond issuance, according to Reuters estimates.

Related: Oil Returns To Rarely Market Optimism

The latest number of bonds comes after Saudi Arabia delayed last week, but again, its oil giant Aramco's long-awaited list for at least a few weeks.

The main stumbling block is that international investors are not buying Saudi insistence that the world's largest oil company is worth $ 2 trillion.

At an initial public offering (IPO) approval meeting last week, Aramco Banks pledged the list, making it clear that foreign investors are in no hurry to invest in the Saudi state-owned oil company with a $ 2 trillion valuation. According to Bloomberg sources, the valuation should be closer to $ 1.5 trillion if Aramco wants to arouse genuine interest from international investors.

By Tsvetana Paraskova for Oilprice.com

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