Saudi Arabia announces borrowing plans for 2017

DUBAI: Saudi Arabia laid out key elements of its borrowing plans for 2017 as the Kingdom seeks to capitalise on investor demand for its debut sale this year to finance the budget deficit.

The world’s biggest oil exporter plans to raise between $10 billion and $15 billion from international bond markets, Mohammad Al Tuwaijri, secretary-general of the Finance Committee at the Royal Court, told Saudi-owned Al Arabiya television. Authorities will sell about 70 billion riyals ($18.7 billion) locally, he said.

Officials from Saudi Arabia have met with banks to discuss the potential sale of Shariacompliant bonds in the first quarter, according to five people familiar with the matter. Saudi Arabia raised $17.5 billion in October in the biggest ever emerging-market bond sale, attracting $67 billion of bids, people familiar with the sale told Bloomberg at the time.

Finance Minister Mohammed Al Jadaan told Bloomberg News on Thursday the country will “most likely” tap debt markets in the first quarter. “We will issue sukuk, but we will issue other instruments at the same time,” he said, declining to give more details.

He said the timing will depend on the conditions of the markets. “We are very comfortable about our cash flow,” he said. The kingdom is turning to debt markets to help fill one of the highest budget deficits in the Middle East after the slump in oil prices battered its revenues.