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Saudi Arabian Govt to issue $5.3 bln of bonds

Saudi Arabian Govt to issue $5.3 bln of bonds

RIYADH: The Saudi Arabian government will sell local banks SAR 20bn ($5.3bn) of three, five and seven-year bonds with floating and fixed rates, according to reports. The Maaal financial website quoted sources as saying the allocations of the bonds would be made on Monday.

Three-year tranches for the fixed rate bonds will be priced at 55-60 basis points over US Treasuries, with the five-year tranche priced at 61-66 over and the seven-year tranche at 72-77 over, the publication said.

The floating rate bonds would be priced at the three-month Saudi interbank offered rate minus 25-30 bps for the three-year tranche, minus 10-15 bps for the five-year tranche and flat to 5 bps over for the seven-year tranche. Reports suggest the government has been selling SAR 20bn of bonds every month to cover its budget deficit, estimated at just under $90bn for 2016.