Saudi Arabia will begin holding meeting tomorrow with potential investors as it plans to issue its first international bonds, official media reported.
An analyst has told AFP the issue could be worth USD 15 billion, as the kingdom tries to adjust its economy to cope with oil revenues which collapsed over the past two years.
Officials have "assigned a number of international and local investment banks to coordinate a series of meetings with bond instrument investors," the Saudi Press Agency said today.
"They will begin Tuesday October 11. In addition, these investment banks will be assigned to manage and organise the first international bonds denominated in US dollars."
Finance Minister Ibrahim al-Assaf has told Bloomberg News that a decision on the timing of the bond, and its amount, has not been made.
The bond could be worth USD 15 billion, Patrick Dennis, lead Middle East economist at Oxford Economics in London, told AFP last month.
"Demand is going to be very good, particularly from Asian investors," he said.
Saudi Arabia has already issued domestic bonds but that has led to a tightening of bank liquidity, Dennis said.
At the same time, the kingdom has very little debt, leaving it room to borrow abroad and prevent a run-down of its foreign reserves, he added.
Official data show the foreign reserves declined from USD 732 billion in 2014 to USD 562 billion in August.
"So although very large still, they have fallen very rapidly in a relatively short period of time, so they do need to diversify their funding sources," Dennis said.
Saudi Arabia cut subsidies, slowed government projects, and last month chopped ministers' salaries while capping wages and benefits for lower-level civil servants to cope with lower revenues.
The kingdom, the world's largest oil exporter, projected a deficit of USD 87 billion this year and has begun a wide-ranging effort to diversify its economy.
At the same time, it has for 18 months been leading an Arab military coalition against rebels in Yemen, at a cost of billions of dollars.
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