Saudi Arabia hires banks for third international bond: report

Saudi Arabia has hired banks to arrange a series of fixed income investor meetings starting Monday ahead of a potential international bond issuance, Reuters reported citing a document issued by one of the appointed banks.

Subject to market conditions, a senior unsecured benchmark deal (Regulation S or 144A bonds) could follow with maturities of 5.5 years, 10.5 years, and 30 years, the document showed.

Benchmark transactions are generally upwards of $500 million.

Goldman Sachs International, GIB Capital, HSBC, J.P. Morgan and MUFG have been appointed as joint lead managers and joint bookrunners.

Banking sources told Reuters that Saudi Arabia could issue up to $10 billion in what would be its third international bond sale after a $17.5 billion debut international bond in 2016— the largest ever sold across emerging markets— and a $9 billion sukuk, or Islamic bond, that took place in April.

The fundraising is needed to cover the Kingdom’s budget deficit, projected at SAR 200 billion for 2017.