Saudi Arabia's government is set to sell SR20 billion ($5.3 billion) of domestic bonds to banks next Monday, according to to the Maaal financial website who quoted official sources.
The domestic bond sale is the latest in a series of monthly SR20 billion offerings by the government to raise funds to bridge a budget deficit. The government has raise 156.6 billion riyals of bonds, of which 70.5 billion has come in the first half of this year, Reuters reported.
In a trend reflected throughout the Gulf, Saudi Arabia has also turned to international markets to borrow money, raising a $10 billion international loan last month.
This month's domestic debt sale will comprise five-, seven- and 10-year bonds in fixed- and floating-rate tranches, according to Reuters.
The fixed-rate bonds would be offered at 60-65 basis points above US Treasuries for the five-year tranche, 72-77 bps over for seven years and 85-90 bps over for 10 years.
The floating-rate bonds would be offered at 25 to 30 bps below the three-month Saudi interbank offered rate for five years, 10 to 15 bps below for seven years and flat to 5 bps above for 10 years.
