Oil rich Saudi Arabia is raising a $10bn, five year loans, as it battles falling crude oil revenues and reserves. According to bankers close to the deal, the loan has a spread of 120bps over Libor.
The issuance was upsized from $6-8bn to $10bn on stronger investor demand.
The issuance provides the kingdom funds as it has burned about $150bn of foreign reserves since 2014 due to the worst slump in crude oil prices.
Leading lenders HSBC, Bank of Tokyo-Mitsubishi and JP Morgan, pledged about $1.3bn each. Minimum bids for the loan were at $500m to qualify as a participant.
This issuance, a first by the kingdom since 25 years, could prompt further issuances by other neighboring nations such as Abu Dhabi which has mandated banks ahead of its third international bond issuance.