Saudi Arabia has hired Goldman Sachs and Société Générale to meet potential investors in a non-deal roadshow, potentially paving the way for the kingdom to launch its first bonds in euros according to both Reuters and Bloomberg.
Riyadh began issuing international bonds in 2016 after lower oil prices hit its finances. Since then, it has become one of the biggest international debt issuers, having sold nearly $60bn in US dollar-denominated bonds.
According with two people familiar with the matter, Saudi Arabia may sell euro-denominated bonds for the first time after testing investor appetite.
It is not a non-deal roadshow, but it’s not a deal announcement. It’s in between"
"It is not a non-deal roadshow, but it's not a deal announcement. It's in between," a source told Reuters. The meetings will start on June 17 in London and end on June 25 in Munich, a second source said.
Representative of the Saudi government will also meet investors in Paris, Zurich, Milan, Amsterdam, The Hague, and Frankfurt.
In December, Mohammed Al-Jadaan, Saudi Finance Minister said that the nation intends to sell about SAR 120bn ($32bn) of local- and foreign-currency debt this year to help fund the deficit, which is expected at about SAR 131bn or 4.2% of gross domestic product in 2019.
The head of the Saudi Debt Management Office (DMO), part of the Ministry of Finance, reiterated in an interview with Reuters last month that the country was looking at potentially issuing debt in euros as part of its "medium term debt strategy."
Saudi Arabia, rated A1 by Moody's and A+ by Fitch, is also planning to issue up to $5bn in international sukuk, or Islamic bonds, in the third quarter of this year, the head of the DMO said.
Goldman Sachs was the Saudi market's top broker by trading volumes and value in May, stock exchange data showed, as foreign banks benefited from a surge of international money into the kingdom.