Saudi Arabia borrows $12 billion by selling bonds in three parts
The National Debt Management Center (NDMC) announced on Tuesday that it has completed the sale of Saudi Arabia’s $12 billion bond, which was issued in three parts as part of the Kingdom’s Global Medium-Term Note Program.
Bond Offering
NDMC announced that investors placed orders totaling about $37 billion, which is three times more than the amount being offered.
The first part of the bond is worth $5 billion and will last for three years, maturing in 2028. The second part is $3 billion for six years, maturing in 2031. The third part is $4 billion for ten years, maturing in 2035.
NDMC explained that this bond sale is part of its plan to attract a variety of investors and help meet the kingdom’s financial needs through international borrowing.
They also mentioned that the high demand for these bonds shows strong confidence in Saudi Arabia’s economy and its future investment opportunities.
Annual Borrowing Plan
On Sunday, Saudi Arabia’s Finance Minister, Mohammed Abdullah Aljadaan, approved the country’s borrowing plan for 2025, after it was approved by the NDMC Board of Directors.
The plan estimates that Saudi Arabia will need about $37 billion (SAR 139 billion) in 2025. This is to cover a budget shortfall of $26.9 billion (SAR 101 billion) for the year.
The plan also shows that Saudi Arabia will need to pay back around $10.1 billion (SAR 38 billion) in debt that is due in 2025.
The NDMC said that Saudi Arabia plans to keep expanding both local and international ways of raising money to meet its financial needs in 2025.
The country also wants to take advantage of market opportunities by making private deals that help grow the economy, such as financing for export credit, infrastructure projects, and capital spending, as well as exploring new markets and currencies based on conditions.
Saudi Debt Market
Fitch Ratings said in September that Saudi Arabia’s sukuk and bond markets are expected to grow to more than $500 billion in the next few years.
The rating agency also mentioned that Saudi Arabia became the biggest issuer of US dollar debt in emerging markets (excluding China) and the largest issuer of sukuk globally in the first half of 2024.
Published: 8th January 2025
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