Saudi Arabia plans to sell up to $17.5bn of debt in its debut global bond as part of its efforts to pivot away from a reliance on oil revenues.
The huge level of interest from investors – it received orders upwards of $50bn – has allowed the country to tighten up the returns on offer for the dollar-denominated debt.
The benchmark 10-year bonds will yield around 3.44 per cent, well below the 3.6 per cent initially suggested, while the five-year debt will yield 2.63 per cent and the 30-years 4.64 per cent.
Although oil prices have recovered from the decade-low of less than $30 a barrel in January to $52 a barrel, they remain half the level of two years ago. Speaking in London today, Saudi’s powerful oil minister called an end to the “considerable” two-year price slump.
The Gulf kingdom’s economic growth is forecast to slow considerably this year as prices for oil remain low, with the International Monetary Fund cutting expectations for annual GDP growth to 1.2 per cent, from 3.5 per cent in 2015.
The fund expects the average price of a barrel of oil to hit $43 this year rising to $51 next year.