TEHRAN (Press Shia Agency) – Saudi Arabia raised $17.5 billion in its first international bond issue, HSBC announced Thursday, after the bank took part in the transaction.
Saudi Arabia divided the issue into three tranches with maturities of five, 10 and 30 years respectively, HSBC said, AFP reported.
The $5.5 billion in 5-year bonds carries a coupon that pays annual interest of 2.375 percent. A further $5.5 billion of 10-year bonds carries a coupon of 3.25 percent interest and the $6.5 billion in 30-year bonds has a coupon with 4.5 percent interest.
The effective annual interest rate, including the coupon and amount of the discount between the face value of the bond and its sale price, is 2.588 percent on the 5-year bonds, 3.407 percent on the 10-year bonds, and 4.623 percent on the 30-year bonds.
The bond issue is larger than many analysts expected and is the largest ever from an emerging-market nation.
Saudi Arabia, the world's largest oil exporter, projected a budget deficit of $87 billion this year after a fall in oil revenues, which still account for most of its income.
In addition, Riyadh has been under tremendous financial pressure due to its expensive military intervention in its southern neighbor, Yemen, which started in March last year in a bid to undermine Yemen’s Ansarullah movement and bring fugitive former Yemeni president, Abd Rabbuh Mansour Hadi, back to power.
More than 10,000 people have been killed and over 14,000 others injured in the Saudi-led aggression. The strikes have also taken a heavy toll on the impoverished country’s facilities and infrastructure, destroying many hospitals, schools, and factories.