Saudi Arabia was also the leading emerging market issuer of international sovereign debt in 2023, selling $26.5 billion of bonds. Its debt raising this year has already topped last year’s total with $26.8 billion.
Writing for Arabian Gulf Business Insight, Matt Smith reports that, “Saudi Arabia, the Middle East’s largest economy despite a 0.8 percent decline in real GDP last year, sold $26.8 billion of international bonds from January 1 to August 27 2024″ and that is expected to expand borrowings further to underwrite infrastructure spending.
Based on data from the London Stock Exchange Group tracking “international” bonds sold to foreign investors, Saudi Arabia led all emerging markets with Poland second with $18 billion and the UAE third with $12 billion.
Lucille Jones, an analyst at London Stock Exchange Group notes that Saudi Arabia has increased its borrowing, “to finance the ambitious projects” related to its Vision 2030 economic diversification and development plan and, that, “significant funding will be required to meet these fixed deadlines and so I would expect that Saudi Arabia will continue to tap the bond markets to raise capital.” She specified Saudi Arabia staging the Asian Winter Games in 2029, Expo 2030 and likely hosting of the men’s football World Cup in 2034.
Thus far in 2024 the top five book runners for Saudi debt issuance are HSBC ($3.11b), JP Morgan ($2.91b), Standard Chartered ($2.79b), Citi ($2.73b) and Bank of China ($2.08b).
Saudi Arabia sold $7.9 billion of international bonds in 2022 and $4 billion in 2021 before increasing its borrowings from the start of 2022.
Manuel Almutawa, senior portfolio manager at Bahrain’s Sico Bank commented that, “While international pension funds and large asset managers typically drive the majority of orders, the conclusion of the interest rate hiking cycle may entice more investors back into fixed income. High-quality emerging market names like Saudi Arabia are expected to benefit from this shift.”
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