Agency: Saudi Arabia to issue its first international bonds in 3 tranches in 2025

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Riyadh - Mubasher: Sources stated that the Kingdom of Saudi Arabia began today issuing its first international bonds in 2025 in three tranches, with the aim of financing the mega projects that the country is witnessing as part of the plan to diversify the economy away from oil, according to Bloomberg.

According to the agency, the Saudi government began today, Monday, the procedures for selling dollar-denominated debt instruments in three tranches; where the indicative price for the three tranches, with a term of three, six and ten years, was set at a premium ranging between 120 and 140 basis points over US Treasury bonds for the same term, according to Bloomberg data.

This came after Saudi Arabia approved the annual borrowing plan for the fiscal year 2025, expecting its financing needs in the fiscal year to reach about 139 billion riyals (about 37 billion US dollars), an increase of 61% over the 2024 borrowing plan.

SAR 101 billion is set to cover the expected deficit in the 2025 budget, while SAR 38 billion is set to cover principal repayments.

According to estimates, Saudi Arabia's budget deficit for next year will reach 101 billion riyals, in parallel with an estimated increase in the debt balance by about 100 billion riyals, to reach 1.3 trillion riyals by the end of 2025.

According to available data, the total size of the public debt portfolio by the end of 2024 amounted to about 1.216 billion Saudi riyals, with local debt accounting for 61%, while international debt represents 39%.

The portfolio's return distribution ratio also recorded 88% as fixed returns, and 12% as variable returns.

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