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🇸🇦 Saudi Arabia /Economy & Trade

Saudi Debt Market Gathers Pace as Sovereign, Bank and Corporate Borrowing Converges

From Asharq Al-Awsat · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Context piece
  • Saudi Arabia, banks and companies are simultaneously raising funds in international debt markets to diversify financing sources.
  • The government raised $3.25 billion through two dollar-denominated sukuk tranches, while Arab National Bank and Ma’aden also completed major offerings.
  • Orders for the sovereign issue exceeded $16.5 billion, highlighting strong investor demand despite high global borrowing costs and geopolitical tensions.

Saudi Arabia’s government, banks and companies are arriving in the international debt market at the same time. The convergence points to a widening reliance on borrowing as the kingdom finances budget needs, investment projects and the expansion of its non-oil economy.

The latest sovereign transaction raised $3.25 billion through two US dollar-denominated Islamic bond, or sukuk, tranches. The offering included a $1.25 billion five-year tranche and a $2 billion 10-year tranche. Final spreads were set at 70 basis points and 80 basis points over US Treasury yields, respectively.

a high level of confidence among international investors in the kingdom’s creditworthiness and its ability to meet its financial obligations.

· Abdullah Al-MairThe King Fahd University of Petroleum and Minerals economist described the strong demand for Saudi Arabia’s sovereign sukuk.

Saudi banks are also strengthening their capital bases. Al Rajhi Bank began offering Tier 2 sukuk, although it has not disclosed the amount. Arab National Bank completed a $750 million Additional Tier 1 sukuk offering with an annual yield of 6.5%. In the corporate sector, Saudi Arabian Mining Co., known as Ma’aden, raised $1 billion through its first international term loan and revolving credit facility.

indicate that Saudi Arabia continues to enjoy strong access to global debt markets

· Abdullah Al-MairHe referred to orders exceeding four times the sovereign issue size.

Investor demand for the government issue was strong. Orders exceeded $16.5 billion, more than four times the size of the transaction, according to the National Debt Management Center. Abdullah Al-Mair, an assistant professor of economics at King Fahd University of Petroleum and Minerals, said the response showed “a high level of confidence among international investors in the kingdom’s creditworthiness and its ability to meet its financial obligations.”

Saudi public debt is expected to rise but remain low by international standards. The International Monetary Fund forecasts debt at 32.6% of gross domestic product this year, compared with 29.8% in 2025. The Finance Ministry projects a ratio of 33.9% in the kingdom’s 2026 budget statement. The IMF has also raised its growth forecasts for Saudi Arabia, citing resilience, an expected improvement in oil revenue and faster growth in non-oil activities.

reflects investors’ positive view of Saudi sovereign risk compared with many other emerging markets

· Abdullah Al-MairHe linked the relatively narrow pricing spreads to investor perceptions of Saudi sovereign risk.
About this summary

Originally published by Asharq Al-Awsat in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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