Saudi Arabia is returning to the bond market with a plan to raise $27bn by the end of the year, in the starkest sign yet of the strain lower oil prices are putting on the finances of the world’s largest oil exporter.
Bankers say the kingdom’s central bank has been sounding out demand for an issuance of around 20bn Saudi riyals ($5.3bn) a month in bonds — in tranches of five, seven and ten years — for the rest of the year.
Fahad al-Mubarak, the governor of the Saudi Arabian Monetary Agency (Sama), said in July that Riyadh had already issued its first $4bn in local bonds, the first sovereign issuance since 2007. But the latest plans represent a major expansion of that programme, which bankers believe could even extend into 2016, given the outlook for the oil price.