Saudi Arabia’s bond sale snapped up by investors

dubai — Saudi Arabia drew a strong response from international bond market.

The finance ministry in Riyadh said on Thursday the order book for the $7.5 billion sale of longerterm debt sale peaked at $27.5 billion, with final pricing only a few basis points above corresponding secondary market yields.

Almost all the paper was bought by foreign investors, with USbased buyers in particular snapping up 40 per cent of the bond due in 2029 and 45 per cent of the note due in 2050.

Middle East buyers only got 3 per cent and 2 per cent of the two issues, respectively.

The sale coincides with improved conditions across emerging markets, with yields compressing over the past few weeks, and Timothy Ash, senior emerging markets strategist at Bluebay Asset Management, called it “opportunistic”.

The ministry of finance confirmed in a statement on Thursday the completion of the $7.5 billion bond sale.

“The issuance received significant interest from international

investors, with the orderbook peaking at $27.5 billion,” it said. It was not yet clear where most of the demand for the paper came from.

Saudi Arabia has become one of the biggest issuers across emerging markets, having sold $52 billion in international bonds since its debut in 2016. It plans to boost borrowing this year, along with state spending.

“Timing-wise this is great, because risky assets are in vogue — 2019 went off like crazy and investors want to put their money to work,” said Philipp Good, chief executive and head of portfolio management at Fisch Asset Management. —