H.E. Mohammed bin Abdullah Al-Jadaan, Minister of Finance, confirmed that the successful offering of the Kingdom’s inaugural Euro denominated international bond as part of the Saudi government's International Programme for the issuance of debt instruments illustrates the Kingdom's position as a leader in the region as well as an important player in international debt capital markets.
Al-Jadaan noted that the euro-denominated bonds come as part of the Debt Management Office’s (DMO) role to secure the kingdom's financing needs at the best possible costs in the short, medium and long term, with risks in line with the kingdom's financial policies. This will help achieve one of the strategic objectives of the Ministry in terms of the optimum use of state assets and innovative financing that contributes to the sustainability of the Kingdom's access to the various international markets at fair pricing.
He went on further to say that the orderbook peaked at 13.5 billion Euros, which was 4.5 times oversubscribed. This highlights the strong demand of both existing and new investors in the EU region, showing their high level of confidence in Saudi government securities, which allowed the DMO to tighten the pricing range to reach a yield of 0.78% in the ـ8 year and 2.04% in the 20 year tranches.
His Excellency the Minister of Finance added: one of the advantages of offering a Euro bond is to increase the diversity of investors, as some investors invest in the euro currency exclusively.
The very high demand has shown that the strength of Saudi Arabia enables it to enter multiple markets at any point in time and the capability of financing diversification.
The Debt Management Office launched a non-deal road show visiting eight European cities: London, Paris, Milan, Frankfurt, Amsterdam, The Hague, Zurich and Munich; meeting 77 European investors during the nine-day trip. Major points of discussion were Saudi Arabia's continued progress in both the global and local capital markets, continued economic reforms and the Kingdom's commitment and progress forward towards achieving the Kingdom's Vision 2030.
The Ministry of Finance announced today the successful completion of the first offering of international bond denominated in the Euro currency, within the Saudi government's International Programme for the issuance of debt instruments, with a total issue of €3 billion (equivalent to SAR 12.70 billion) divided into two tranches as follows: €1 billion (equivalent to SAR 4.2 billion) for the 8 years tranche maturing 2027, and €2 billion (equivalent to SAR 8.4 billion) for 20 year tranche of maturing 2039.