Saudi representatives meet Taiwananese bond investors

DUBAI, July 10, (RTRS): Saudi Arabian government representatives were in Taiwan last week to meet bond investors in a so-called “non-deal roadshow”, sources familiar with the matter said.

A potential sale of Formosa bonds — debt securities sold in Taiwan by foreign issuers and denominated in currencies other than the Taiwanese dollar — could allow Saudi Arabia to tap a new investor base at a time of adverse conditions in emerging markets.

To offset lower revenues caused by a slump in oil prices, the Saudi government has borrowed $50 billion through dollar bond sales since its debut in international debt markets in late 2016.

A “non-deal roadshow” is a series of investor meetings not tied to a specific deal.

The Saudi debt management office did not immediately respond to a request for comment.

Other issuers in the Gulf, particularly financial institutions, have frequently issued Formosa bonds over the past year. Qatar National Bank, the Gulf’s largest bank, and First Abu Dhabi Bank, the largest lender in the United Arab Emirates, did so in January.

In April the government of Qatar also tapped the market, issuing a $6 billion 30-year Formosa bond as part of a $12 billion triple-tranche debt offering. It was the first ever sovereign Formosa 30-year bond issue.

Taiwan is attractive from an issuer perspective because liquidity in its banks allows borrowers to sell debt at lower costs than in conventional markets.