The Fixed Income News Service (IFR) reported that the Saudi Public Investment Fund issued bonds in three tranches worth five billion dollars, on Monday.
The Kingdom's sovereign wealth fund, whose assets it managed as of September 30 amounted to about $718 billion, joined a wave of bond issuance operations witnessed in emerging markets this year.
The service said the bond sale attracted strong demand exceeding $27 billion, according to Reuters.
She added that the final price spread narrowed from the initial indicative price to reach 115 basis points over five-year US Treasury bonds from 150 initially, and to 145 basis points over 10-year bonds from 175 initially, and to 205 basis points for 30-year bonds. From 235 at first.
Egypt's Citi Group, Goldman Sachs International and JP Morgan will be joint global coordinators for the bond offering, according to documents.
The final size of the bond sale is expected to be announced later Monday.
The Public Investment Fund is the main tool that Saudi Arabia relies on to implement an ambitious plan within which the Kingdom spends billions on diversifying the economy with the aim of reducing dependence on oil revenues.
The Fund raised tens of billions to finance a huge investment program to provide new industries and job opportunities through expansion at home and abroad through a large number of investments and joint projects, in addition to knocking on the doors of the debt market.
Earlier this month, Saudi Arabia, the world's largest oil exporter, launched a process to sell bonds in three tranches worth $12 billion. Last October, the Fund completed the issuance of sukuks worth $3.5 billion. Both versions attracted strong demand.
Bond issuances in emerging markets made a strong start in 2024, with bond sales exceeding $30 billion in the first half of January.
Bond sales have received interest from top-rated sovereign funds, as Mexico launched its largest sale ever, worth $7.5 billion, in early January, and Poland, Hungary, and Indonesia are active in this market.
In addition to Saudi Arabia, at least five other countries are expected to issue bonds worth at least ten billion dollars, namely Indonesia, Poland, Turkey, Israel and Mexico, and the volume of bond issuance from Mexico is likely to reach $18 billion.
Analysts at Morgan Stanley indicate that developing countries will issue bonds worth about $165 billion this year, an increase of approximately 20 percent, or $30 billion, over 2023.
