Saudi Arabia Raises $5bn via Dual-Tranche Sukuk, Plans $15.5bn Debt Buyback

Saudi Arabia raised $5bn via a dual-tranche sukuk issuance, its first dollar issuance since November last year. It raised:

• $2.5bn via a 6Y sukuk at a yield of 5.268%, 30bp inside initial guidance of T+135bp area. The new sukuk offer a new issue premium of 17.8bp over its older 3.625% 2028s that currently yield 5.09%
• $2.5bn via a 10Y sukuk at a yield of 5.5%, 30bp inside initial guidance of T+180bp area. The new sukuk offer a new issue premium of 32bp over its existing 2.75% 2032s that currently yield 5.18%

Proceeds from the issuance would be used for general budgetary purposes and financing a concurrent tender offer. The bonds are rated A1/A (Moody’s/Fitch) The sovereign launched a tender offer to buyback up to $15.5bn of the following bonds:

• Its outstanding $3bn 2.875% 2023s that are currently trading at 99.58, yielding 4.01%
• Its outstanding $4.5bn 4% 2025s that are currently trading at 97.34, yielding 5.15%
• Its outstanding $2.5bn 2.9% 2025s that are currently trading at 94.08, yielding 5.05%
• Its outstanding $5.5bn 3.25% 2026s that are currently trading at 93.94, yielding 4.93%

All the bonds will be bought for cash and the maximum acceptance prices will be determined soon. The bonds were trading almost unchanged. The tender offer deadline is on October 24.