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Saudi Arabia starts selling 3-tranche benchmark-size dollar debt

Saudi Arabia, acting through the ministry of finance, has mandated banks to price a series of 144A Regulation S senior unsecured offerings under its Global Medium Term Note program.

The initial price thoughts (IPTs) for the three-year note with coupon at fixed rate, semi-annual payments, are in the US Treasury +120 basis points area.  

The IPTs for the six-year note with coupon are in the UST+130 bps area, while for the 10-year note they are in the UST+150 bps area.      

The issuances, expected to be rated Aa3 and A+ by Moody's and Fitch respectively, will be listed on the London Stock Exchange. They will be used for general domestic budgetary purposes. The notes are set to priced on Monday.

Citi, Goldman Sachs International and J.P. Morgan are the global co-ordinators and joint book runners. BNP Paribas, First Abu Dhabi Bank, HSBC, Mashreq, SNB Capital and Standard Chartered Bank are the passive book runners.

The oil-rich kingdom’s funding needs for this year are estimated to be 139 billion riyals ($37 billion), the National Debt Management Center (NDMC) said in a statement on Sunday. About SAR 101 billion will cover the budget deficit, while SAR 38 billion will be used to repay maturing debt, the NDMC said.