National Debt Management Center Issues Sovereign Bonds in Euro with Negative Return

Thursday 1442/7/13 - 2021/02/25
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Riyadh, February 25, 2021, SPA -- In line with the Kingdom's Vision 2030, the Fiscal Balance Program and the Financial Sector Development Program, the National Debt Management Center closed its second international euro-denominated offering under the Kingdom of Saudi Arabia’s government bond program. The Center announced the issuance on the morning of yesterday, Wednesday, February 24, 2021 and closed on the same day, in line with the implementation of European sovereign bond issuances and allowing to attract maximum demand from investors.
In an unprecedented historical step, the Center took advantage of the opportunity to enter the Euro market, the second largest after the U.S. Dollar market, by issuing debt instruments with negative returns, making it the largest tranche issued with a negative return outside the European Union.
An estimated 1.5 billion euros were raised from subscriptions, consisting of two tranches as follows: 1 billion Euro for 3 year notes maturing 2024, with a negative return of -0.06%, and 0.5 billion Euro for 9 year notes maturing 2030, with a return of less than 1%. This enhances and reflects investor confidence in the strength of the Saudi economy, as international portfolios have become fully aware of the creditworthiness of the Kingdom since the issuance of international debt instruments in 2016.
This is the second international issuance for the Kingdom in 2021 as it issued $5 billion in January.
One of the advantages of the Kingdom's entering to the euro market is expanding the base of investors in general and European investors in particular, in addition to the diversity of investors in the market, as some investors only invest in euro.
The Kingdom is the first GCC country to issue bonds in euro in 2019.
The high demands proved that the strength of the Kingdom of Saudi Arabia enables it to enter different markets without affecting the debt prices in the long run, the possibility of diversifying sources of financing, proving the sovereign power of the Kingdom and the possibility of consolidating and building strategic relationships.
05:32 LOCAL TIME 02:32 GMT