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Saudi Arabia Issues $12 Billion in Dollar Bonds in 3 Tranches

The Kingdom sold $12 billion worth of US dollar bonds on Tuesday. (SPA)
The Kingdom sold $12 billion worth of US dollar bonds on Tuesday. (SPA)
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Saudi Arabia Issues $12 Billion in Dollar Bonds in 3 Tranches

The Kingdom sold $12 billion worth of US dollar bonds on Tuesday. (SPA)
The Kingdom sold $12 billion worth of US dollar bonds on Tuesday. (SPA)

Saudi Arabia’s National Debt Management Center (NDMC) has completed the first offering of international bonds in 2024 at a value of SR 45 billion ($12 billion), within the international government bond program.
The Kingdom sold $12 billion worth of US dollar bonds on Tuesday, in its largest issuance since 2017. The three-part deal includes bonds maturing in 2030, 2034 and 2054.
According to a statement by NDMC, the value of the first tranche was $3.25 billion for a 6-year bond maturing in 2030. The second tranche totaled $4 billion for a 10-year bond maturing in 2034, while the third totaled $4.75 billion for a 30-year bond maturing in 2054.
The debt center added the total issuance was oversubscribed 2.5 times, reaching around $30 billion.
The statement noted that this step was part of the National Debt Management Center’s strategy to expand the investor base in order to meet the Kingdom’s financing needs from global debt markets efficiently and effectively.
It also stressed that the volume of demand by international investors for government debt instruments reflected their confidence in the strength of the Saudi economy and the future of investment opportunities in the Kingdom.
According to Bloomberg, the Kingdom follows the example of countries such as Mexico, Indonesia, and Poland, which have issued nearly $25 billion in bonds since the beginning of 2024, making it the busiest start to a year ever in terms of dollar and euro-denominated debt issuances in developing countries.
Citigroup, JPMorgan Chase, HSBC Holdings and Standard Chartered are managing the deal.

 

 

 

 

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British Assets Gain, Mid-cap Stocks Lead after Labour Election Win

A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
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British Assets Gain, Mid-cap Stocks Lead after Labour Election Win

A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights

British domestic-focussed mid-cap stocks were the biggest gainers on Friday after the centre-left Labour Party surged to a comprehensive win in a parliamentary election with blue chip stocks, government bond prices and the pound higher.

Hopes that the incoming government will provide a period of economic stability after an often tumultuous 14 years of Conservative Party rule sent the FTSE 250 midcap index (.FTMC), up as much as 1.8% in early trading to its highest since April 2022.

The blue chip FTSE 100 index (.FTSE), was last up 0.2% and the yield on 10-year British government bonds or gilts, dropped 3 basis points to 4.17%, marginally better than other European markets, Reuters reported.

Labour won a massive majority in the 650-seat parliament while Rishi Sunak's Conservatives suffered the worst defeat in the party's long history as voters punished them for a cost of living crisis, failing public services, and a series of scandals.

"A landslide victory provides the sort of clarity and stability that equity markets need in an increasingly volatile world," said Ben Ritchie, head of developed market equities at abrdn.

"If the new government gets this right, businesses with significant exposure to the UK economy should be the likely winners - a shot in the arm in particular for companies in the FTSE 250 and FTSE Small Cap".

British home builders stood out, with an index tracking their shares up 2.3%.

"We think the formation of a Labour-majority government will have a positive impact on housebuilders and construction materials," said Aruna Karunathilake, portfolio manager at Fidelity.

"We expect Labour to reinstate housebuilding targets and perhaps also fund investment in local planning departments... That should alleviate builders’ concerns about planning bottlenecks impeding growth in the medium term."

Analysts at Goldman Sachs said that while Labour's manifesto policies imply relatively limited changes to fiscal policy they would modestly boost demand in the near term.

As a result, they raised their forecasts for British GDP growth by 0.1 percentage points in each of 2025 and 2026.