Finance Minister Mohammed Al Jadaan approved Saudi Arabia’s annual borrowing plan which estimates financing requirements of approximately $37 billion in 2025 to cover the expected budget deficit as well as about $10 billion in debt maturities. The National Debt Management Center issued a release on January 5 saying:
“His Excellency the Minister of Finance, Mr. Mohammed Abdullah Aljadaan, has approved the Annual Borrowing Plan for the fiscal year 2025… According to the plan, the projected funding needs for 2025 are estimated at approximately SAR 139 Bn. This amount is intended to cover the anticipated budget deficit of SAR 101 Bn for the fiscal year 2025, as outlined in the Ministry of Finance’s Official Budget Statement. And the principals’ repayment of the debts maturing in the current year, 2025, amounting to approximately 38 billion Saudi Riyals… Saudi Arabia aims in 2025 to continue diversifying local and international financing channels to efficiently meet funding needs. This will be achieved through the issuance of sovereign debt instruments at fair pricing, guided by well-defined and robust risk management frameworks. Additionally, the Kingdom plans to benefit from market opportunities by executing private transactions that can promote economic growth, such as export credit agency financing, infrastructure development project financing, capital expenditure (CAPEX) financing, and exploring tapping into new markets and currencies based on market conditions.”
Moving quickly in the new year, Saudi Arabia just successfully raised $12 billion from global debt markets in a three-part bond sale that had a total order book of around $37 billion. This bond sale included $5 billion, $3 billion and $4 billion in tenors of three, six and 10 years.
Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. managed the transaction.
Last week it agreed to a $2.5 billion three-year revolving credit facility with the Abu Dhabi Islamic Bank, Credit Agricole SA and Dubai Islamic Bank.
Likewise, Saudi Arabia’s Public Investment Fund with about $930 billion assets under management plans to raise $7 billion in a murabaha credit facility. The financing is part of the fund’s medium-term capital-raising strategy and is supported by a syndicate of 20 international and regional financial institutions, the PIF said on Monday.
According to Abeer Abu Omar and Matthew Martin writing for Bloomberg, Saudi Arabia issued $17 billion worth of international bonds in 2024, second only to Romania among emerging markets. Those bonds were denominated in dollars and this year Saudi Arabia’s finance ministry may diversify its funding base with other currencies.
