Huge International Demand for Saudi Government Bonds

Huge International Demand for Saudi Government Bonds
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Huge International Demand for Saudi Government Bonds

Huge International Demand for Saudi Government Bonds

The Saudi Finance Ministry announced Thursday pricing its fourth international bond, attracting massive orders- three and a half folds its value.

The ministry confirmed in a statement the completion of the $7.5 billion bond sale. “The issuance received significant interest from international investors, with the orderbook peaking at $27.5 billion,” it said.

The country is rated A1 by Moody's and A+ by Fitch.

The strong response to the Saudi government bonds reflects the high confidence in the country’s economy. It also shows the investors’ trust in economic reforms the kingdom is working on.

Saudi Arabia has become one of the biggest emerging market issuers, having sold $52 billion in international bonds since its debut in 2016. It plans to boost borrowing this year, along with state spending.

The Kingdom’s 2019 budget revealed a record spending worth SAR1.106 trillion ($295 billion) which is a 7 percent growth rate compared to 2018. According to the figures, the expected revenues in 2019 are estimated at SAR975 billion ($260 billion) with a nine percent growth rate compared to last year.

The budget has proven the solidity of the country’s economy in which the announced figures showed a rise in the spending volume, going in tandem with Saudi Vision 2030 and related national programs.

Saudi Vision 2030 aims at diversifying the economy and achieving stability, economic and financial sustainability, as well as stimulating the private sector and improving the living standards of citizens.



Lebanon Bonds Rally to Fresh Two-year High on Ceasefire Hopes

A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir
A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir
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Lebanon Bonds Rally to Fresh Two-year High on Ceasefire Hopes

A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir
A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir

Lebanon's deeply distressed sovereign dollar bonds hit a fresh two-year high on Tuesday as investors bet that a potential ceasefire with Israel could improve the country's prospects.

The bonds, which are still trading below 10 cents on the dollar, have gained more than 3% this week. The 2031 maturity was biding at 9.3 cents on the dollar, its highest since May 2022, according to Reuters.

"Some investors are mulling if it is a right time to buy, since a ceasefire is the first step needed to at some point in time restructure bonds," said Bruno Gennari, emerging markets strategist with KNG Securities International.

Israel's cabinet is expected to convene on Tuesday to discuss, and likely approve, a US plan for a ceasefire with the Iran-backed Hezbollah, a senior Israeli official said.

Israeli airstrikes, which continued on Tuesday, have decimated Lebanon's infrastructure and killed thousands.

But the counterintuitive rally, the second since Israel began bombing the country in September, was driven by bets that the deal could jolt Lebanon's fractured political system and revive efforts to pull the country out of default.