Saudi Arabia’s first Islamic bond sale raises $9bn

Saudi Arabia raised $9 billion (8.4 billion) in its first dollar-denominated Islamic bond sale, $1 billion (€940,000) more than what the government was said planning to issue initially.

The government sold a $4.5 billion (€4.2 billion) five-year sukuk tranche at 100 basis points over the mid-swap rate and an equally-sized 10-year tranche at a spread of 140 basis points to the benchmark, according to data compiled by Bloomberg.

Domestic markets

Investors submitted more than $33 billion (€31 billion) in bids, people with knowledge of the offering said earlier. Investors placed orders in excess of $33 billion, the country’s Ministry of Finance said in a statement.

Saudi Arabia is tapping international and domestic markets to help finance a budget deficit that may reach $53 billion (€49.9 billion) this year.

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The kingdom raised $17.5 billion in October in the biggest ever bond sale from an emerging-market nation, underlining the deepening strain on a nation that has eschewed international debt markets until now.

– (Bloomberg)