Saudi Arabia picks Citi, Goldman, HSBC, Morgan Stanley for new bond – sources

By Saeed Azhar, Katie Paul and Sudip Roy

DUBAI, March 15 (Reuters) - Saudi Arabia has selected Citi,Goldman Sachs, HSBC and Morgan Stanley as the main banks thatwill arrange its next U.S. dollar bond issue, sources familiarwith the matter said.

The country is planning to borrow funds in the internationaldebt capital markets soon, in what would be its fourthinternational public debt issue.

Both Saudi Arabia’s Debt Management Office and the fourbanks declined to comment.

Saudi Arabia started raising U.S. dollar debt in 2016through a $10 billion syndicated loan, as the country’s financeswere squeezed by a slump in oil prices.

After the loan deal, the country started borrowinginternationally through jumbo bond issues, establishing itselfas the most prominent issuer in the region.

It sold a $17.5 billion bond in 2016 – the largest bond eversold by an emerging market issuer – followed by a $9 billionsukuk and a $12.5 billion conventional bond in 2017.

It is not clear whether the upcoming deal will be as largeas Saudi’s previous issues. The head of the Debt ManagementOffice (DMO) said in October last year that the government wasconsidering whether to make a greater number of internationalbond sales but reduce the size of the transactions.

Saudi Arabia has recently refinanced, extended and upsizedits $10 billion loan, bringing the facility up to $16 billion.

The DMO said in January that it had contacted banksrequesting proposals to refinance the loan facility, arrangefurther U.S dollar debt issuance and for additional financingsupported by foreign countries’ export credit agencies.

“The bond request for proposal is a continuation of thefunding programme established by KSA in 2016, and as part of theKingdom’s commitment to the international debt market,” the DMOsaid at the time.

(Additional reporting by Davide Barbuscia and Tom Arnold.Editing by Jane Merriman)