The Kingdom of Saudi Arabia has announced the issuance of $500 million in US dollar-denominated international bonds, divided into three tranches. This move is part of the Kingdom’s efforts to finance the expected budget deficit for 2025 and achieve its ambitious development goals.
Bond Details: Attractive Yields and Diverse Maturities
The bonds include three tranches:
- First Tranche: 3-year maturity with a yield of 120 basis points above US Treasury bills.
- Second Tranche: 5-year maturity with a yield of 130 basis points.
- Third Tranche: 10-year maturity with a yield of 140 basis points.
These bonds are expected to attract significant interest from international investors, especially given the stability of the Saudi economy and global market confidence in the Kingdom’s financial performance.
2025 Borrowing Plan: Clear Vision and High Transparency
Saudi Finance Minister Mohammed Al-Jadaan approved the annual borrowing plan for 2025, which includes covering an estimated budget deficit of 101 billion riyals and repaying 38 billion riyals in principal debt. This plan reflects the Kingdom’s commitment to transparent debt management and diversifying funding sources to achieve its economic goals.
Track Record of Bond and Sukuk Issuances
Saudi Arabia previously issued international bonds and local sukuk in 2024, with a total value exceeding $17 billion. These steps highlight the Kingdom’s reliance on debt instruments to support its massive projects and achieve Vision 2030, which aims to diversify the economy and promote sustainable growth.