New Straits Times

Saudi Arabia raising loan size to US $16b

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RIYADH: Saudi Arabia is increasing a US$10 billion (RM39.3 billion) syndicated loan by US$6 billion as the country steps up borrowing to plug a budget deficit.

Existing holders and new banks showed “an exceptiona­l response”, said the finance ministry debt management office on Friday.

The new US$16 billion loan will be priced “at a margin representi­ng a 30 per cent reduction from levels set in 2016”, it said.

The world’s biggest oil exporter plans to borrow about US$31 billion this year to bridge an expected budget deficit of US$52 billion and fund growth plans after its economy shrank last year. Saudi Arabia raised about US$36 billion last year, including US$14 billion of domestic bonds and US$22 billion from internatio­nal debt markets.

The terms are a “recognitio­n of the strengthen­ing of the Saudi economy”, said Finance Minister Mohammed Al Jadaan.

The debt office is currently finalising the documentat­ion process for the transactio­n and intends to close the financing by mid-March. A significan­t Islamic tranche will also be introduced in the deal, it said.

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