RIYADH: Saudi Arabia is planning to issue new bonds and sukuk denominated in US dollars while offering their holders the opportunity to acquire existing notes in exchange for cash.
The price guidance for the new notes was around 135 basis points over US treasuries for sukuk and 180 basis points over US Treasury bonds for conventional bonds, respectively, according to London Stock Exchange filings.
Saudi Arabia’s finance ministry has also extended a tender call to holders of the country’s $3 billion bonds due in 2023, $4.5 billion notes due in April 2025, $2.5 billion bonds due in October 2025, and $5.5 billion notes due in 2026.
The amount of the tender offer that will be accepted will be revealed following the pricing of the new bonds and sukuk, which is expected later today.
The deadline for bondholders to participate in the tender offer is Oct. 24, and an indication of the results will be available the next day.
BNP Paribas, Goldman Sachs and HSBC are global coordinators and joint bookrunners on the debt sale, while Aljazira Capital, Citi, JPMorgan and Standard Chartered are passive joint lead managers and bookrunners.
Early this month, Saudi Arabia’s sovereign wealth fund issued green bonds to raise $3 billion.
The Public Investment Fund is at the center of Saudi Arabia’s ambitious reform plans being spearheaded by Crown Prince Mohammed bin Salman to wean the economy off oil.
The crown prince said in December that it would invest about $40 billion in the local economy this year, after spending about $22 billion last year.
Reuters reported in July last year that PIF was setting up a financing framework that would allow it to raise green bonds.
In February, PIF announced a green finance framework that showed net proceeds from a debt sale would go toward eligible projects, including in renewable energy, clean transport and green buildings.
The deal is expected to raise billions of dollars, sources have said.
Fitch Ratings and Moody’s in February assigned PIF an ‘A’ and ‘A1’ credit rating, respectively.
PIF started raising bank debt in 2018 with an $11 billion facility, followed in 2019 by a $10 billion loan which it then repaid in 2020.
Those loans were provided by what PIF has called its core banking group comprising Bank of America, BNP Paribas, Citi, Credit Agricole, HSBC, JPMorgan, Mizuho, MUFG, Standard Chartered and SMBC.
In March last year, the wealth fund raised $15 billion from 17 banks comprising most of the core banking group, as well as Credit Suisse, Deutsche Bank, First Abu Dhabi Bank, Goldman Sachs, Intesa Sanpaolo, Morgan Stanley, Natixis and Societe Generale.
