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UPDATE 1-Saudi Arabia begins marketing triple-tranche bond
September 26, 2017 / 12:31 PM / in 20 days

UPDATE 1-Saudi Arabia begins marketing triple-tranche bond

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By Sudip Roy

LONDON, Sept 26 (IFR) - Saudi Arabia has opened books on a triple-tranche US dollar issue 30bp-40bp back of its curve.

The sovereign has announced guidance of 130bp area over Treasuries for a March 2023 note, plus 165bp area for a March 2028 bond, and plus 200bp area for an October 2047 tranche.

Saudi Arabia has US$5.5bn Oct 2021s trading at a G-spread of 97bp, according to Thomson Reuters Eikon. It also has US$5.5bn Oct 2026s at plus 124bp and US$6.5bn Oct 2046s at plus 170bp.

Those three were issued nearly a year ago when the sovereign raised US$17.5bn through the biggest ever deal from an emerging markets issuer.

The size of the latest issue, which will price on Wednesday, has yet to be decided with the only information confirmed being that all three tranches will be of benchmark size. Banking sources told Reuters on Monday that they expect up to US$10bn in total.

This will be the second US dollar deal from Saudi Arabia this year following a US$9bn sukuk in April.

The sovereign is raising funds in both the international and local markets to finance a budget deficit that is estimated to hit US$52.8bn for the fiscal year 2017, according to the ministry of finance.

GIB Capital, Goldman Sachs, HSBC and JP Morgan are active leads on the 144A/Reg S deal. MUFG is a passive bookrunner.

Saudi Arabia is rated A1 (stable) by Moody’s and A+ (stable) by Fitch. (Reporting by Sudip Roy, editing by Julian Baker)

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