Saudi Arabia is poised to launch its first ever international bond sale on Wednesday as the kingdom turns to debt markets to help ease a fiscal squeeze from the two-year slump in oil prices.
Banks connected to the sale said the Saudis are due to conclude a transatlantic roadshow on Tuesday for the dollar-denominated bond — one of the most eagerly awaited issues this year — after which they will release initial price guidance.
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Time For Truth: (CNBC) – Saudis set to launch first international bond sale on Wednesday
Wall Street markets fell slightly on Wednesday weighed down by energy stocks, as crude oil prices fell sharply.
US data showed an unexpected rise in crude stocks, while investors are concerned that oil exporters will fail to address the global oversupply.
Foreign investors sold a record amount of U.S. Treasury bonds and notes for the month of April, according to U.S. Treasury Department data on Wednesday, as investors priced in a few more rate increases by the Federal Reserve this year.
Foreigners sold $74.6 billion in U.S. Treasury debt in the month, after purchases of $23.6 billion in March. April’s outflow was the largest since the U.S. Treasury Department started recording Treasury debt transactions in January 1978.
Saudi Arabia has outlined plans to ramp up its austerity programme and avert the threat of national bankruptcy amid a sliding oil price and growing tensions with its regional oil-exporting rival Iran.
In an interview with Bloomberg, deputy crown prince Mohammed bin Salman said the country’s economic reform programme would raise an extra $100bn (£70bn) in revenues a year by 2020, tripling income from non-oil sources and balancing the budget.
Saudi Arabia’s petroleum minister on Tuesday ruled out the possibility that a recently announced oil production freeze by several countries might lead to cuts to reverse the plunge in oil prices.
“There is no sense wasting our time seeking production cuts,” Ali bin Ibrahim al-Naimi told energy executives at the annual IHS CERAweek conference. “That will not happen.”