Saudi Arabia’s National Debt Management Center (NDMC) announced today the completion of receiving investors’ requests for the international issuance of a triple-tranche bond under the Kingdom’s Global Medium-Term Note Issuance Program (GMTN).
The Kingdom issued a triple-tranche bond worth SAR45 billion ($12 billion). The value of the first tranche is $5 billion for a 3-year bond maturing in 2028. The second tranche totaled $3 billion for a 6-year bond maturing in 2031, while the third tranche totaled $4 billion for a 10-year bond maturing in 2035.
The NDMC also announced that the total order book reached around $37 billion, which equals an oversubscription of 3 times of the total issuance.
2025 annual borrowing plan approved
This bond issuance is part of NDMC’s strategy to diversify the investor base and meet Saudi Arabia’s financing needs from international debt capital markets efficiently and effectively. The bid-to-cover ratio reflects the strong demand for the Kingdom’s issuances, confirming the high investor confidence in the strength of the Kingdom’s economy and its investment opportunities future.
Saudi Arabia’s latest $12 billion triple-tranche bond issuance comes after the Minister of Finance, Mohammed Abdullah Aljadaan, approved the annual borrowing plan for the fiscal year 2025. The plan highlights key developments in public debt for 2024, initiatives related to local debt markets, and the funding plan and its guiding principles for 2025, in addition to the 2025 issuance calendar for the Local Saudi Sukuk Issuance Program in Saudi Riyal.
According to the plan, the projected funding needs for 2025 reach approximately SAR139 billion. This amount will cover the anticipated budget deficit of SAR101 billion for the fiscal year 2025.
Last week, Saudi Arabia’s NDMC also announced the completion of an arrangement for securing a Shariah-compliant revolving credit facility worth $2.5 billion. The credit facility, which spans a tenure of three years, seeks to finance the general budgetary needs and was secured with the participation of three regional and international financial institutions.
Read: Saudi PIF completes $7 billion inaugural murabaha credit facility
Diversifying financing channels
To enhance the sustainability of the Kingdom’s access to various debt markets and broaden the investor base, Saudi Arabia aims in 2025 to continue diversifying local and international financing channels to efficiently meet funding needs. It will achieve this target through the issuance of sovereign debt instruments at fair pricing, guided by well-defined and robust risk management frameworks.
Additionally, Saudi Arabia plans to benefit from market opportunities by executing private transactions that can promote economic growth, such as export credit agency financing, infrastructure development project financing, capital expenditure (CAPEX) financing, and exploring tapping into new markets and currencies based on market conditions.
