Saudi Bond Spree Continues as Wealth Fund Taps Dollar Market

(Bloomberg) -- Saudi Arabia’s bond spree continued Wednesday as its sovereign wealth fund sold $4 billion of dollar debt.

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The Public Investment Fund priced notes with maturities of five years and 9 1/2 years, according to a person familiar with the matter who asked not to be identified sharing private information. The premiums above US Treasuries are respectively 95 and 110 basis points — both 30 basis points less than initial price talk.

The tighter pricing occurred as orders topped $16 billion, excluding joint lead manager interest, the person said, with demand has been equally split across the two notes. The deal followed a $12 billion bond by the Saudi government earlier this month, while the PIF signed a $7 billion Islamic loan with 20 banks around the same time.

BNP Paribas SA, Citigroup Inc, Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase & Co. and Standard Chartered Plc were the main banks arranging Wednesday’s bond sale, the person said.

In the past year, Saudi Arabia — via the sovereign and state entities such as the PIF, which has roughly $925 billion of assets — has been one of the most prolific issuers among emerging markets.

The country has spending plans of more than $1 trillion related to Crown Prince Mohammed bin Salman’s drive to diversify the economy from oil. That’s caused the kingdom’s budget to go into deficit and forced it to sell more debt in international markets.

The PIF is the main entity tasked with executing MBS’s Vision 2030, and has said it plans to boost local investments — including in artificial intelligence — to as much as $70 billion annually from next year.

--With assistance from Matthew Martin.

(Updates with deal pricing)

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