Well-informed sources revealed that Saudi Arabia’s fixed-rate debt will make up about 90 percent of government borrowing by the end of 2023 as interest rates rise.
Saudi Crown Prince Mohammed bin Salman (MBS) is also assessing refinancing through borrowing more in currency to manage its outstanding floating-rate debt.
The Public Investment Fund (PIF), headed by MBS, secured more than $32 billion of orders for the bonds that have maturities of 7, 12 and 30 years, according to people familiar with the matter.
The sources further pointed out that the fixed-rate debt will make up about 90 percent of government borrowing by the end of 2023
Saudi Arabia’s government tapped the debt market in January, raising $10 billion through its first Eurobond sale of 2023.
The PIF plans to use the proceeds for general corporate purposes and to finance, refinance and invest in mega projects.
The Saudi debts date back to 2018 from three primary dealers: Goldman Sachs, HSBC Holdings Plc and JPMorgan Chase.
The kingdom sold $2 billion of Islamic debt maturing in 9 1/2 years and $1.25 billion of 30-year conventional bonds, according to people familiar with the matter. The 30-year notes were priced to yield 3.36%.
Investors bid for more than three times the $3.25 billion that Saudi Arabia raised in sales of dollar bonds, the country’s third foray into international debt markets this year.
Saudi Arabia has already removed restrictions on foreign strategic investors in shares of listed companies.
Since taking office, MBS has made nothing worthful for the Saudi society but wars and crises. In contrast, Saudi Arabia has witnessed an unprecedented economic and political crisis.
In a failed attempt to cover up his failure, MBS has declared several projects to whitewash his dark reality.
Since 2021, MBS declared a series of fake projects that will never see the light of day.
Meanwhile, the unemployment rate among Saudis was 16.1% in 2015. However, unemployment among Saudis reached 25% by mid 2021.
Based on estimates of King Khalid Foundation in Saudi Arabia, one out of four young people (15–24 years old) drops out of school and training option to join the labor market.
Thus, one million young people out of 3.92 do not receive any educational or training opportunities to be able to integrate into the labor market.
According to the study, 25% of Saudi young people do not complete their education and training, which means that an estimated 45 billion riyals are annually lost including unearned wages, unrealized social insurance contributions, and unpaid tax revenues.
