Prime Highlights:

Saudi Arabia successfully issued a $12 billion triple-tranche bond, comprising three-year, six-year, and ten-year maturities.

The offering was significantly oversubscribed, with the total order book reaching $37 billion.

This issuance forms a key part of Saudi Arabia’s broader strategy to diversify its investor base and meet its financing needs.

Key Background:

Saudi Arabia successfully raised $12 billion through a triple-tranche bond issuance under its Global Medium-Term Note (GMTN) Programme, receiving strong demand from investors. Launched by the National Debt Management Center (NDMC), the issuance attracted orders totaling $37 billion, marking an oversubscription of three times. The bonds were issued in three tranches: a $5 billion three-year bond maturing in 2028, a $3 billion six-year bond maturing in 2031, and a $4 billion 10-year bond maturing in 2035.

This bond issuance aligns with the NDMC’s strategic objective to expand Saudi Arabia’s investor base and address the country’s evolving financing requirements within international debt markets. The robust investor demand highlights the confidence in Saudi Arabia’s economic stability and its long-term investment potential.

The issuance is part of Saudi Arabia’s broader fiscal strategy to raise approximately SR139 billion ($37 billion) in 2025, aiming to bridge an expected budget deficit of SR101 billion and refinance SR38 billion of maturing debt. This is consistent with the Kingdom’s fiscal discipline and its economic transformation goals as outlined in Vision 2030.

As part of its annual borrowing program, the NDMC regularly undertakes bond issuances to meet budgetary shortfalls and debt service obligations. The bonds are benchmarked against US Treasuries, reflecting the Kingdom’s standing in the international debt markets.

In addition to bond issuances, the NDMC secured a Shariah-compliant revolving credit facility worth $2.5 billion in December 2024. Sponsored by both regional and international financial institutions, this credit facility supports the Kingdom’s medium-term debt strategy. Fitch Ratings anticipates that Saudi Arabia’s debt issuance in 2025 will not only reflect its fiscal needs but also its broader economic diversification efforts and large-scale government projects. The Kingdom’s debt capital market is expected to surpass $500 billion in the short to medium term, guided by the strategic initiatives of Vision 2030.