Saudi Arabia

Saudi Arabia on Monday announced its plans to diversify away from oil production through a plan it called "Vision 2030". But the oil rich nation won't find it easy to execute in the plan, particularly when it comes to attracting skilled foreigners to fuel its goals.

Saudi Arabia’s plans for economic and social reform will involve developing its financial markets, including the use of derivatives.

Even the big beast of the Middle East is suffering the financing pressure sweeping the region. The margin on oil-drenched Saudi Arabia’s $10bn loan, revealed this week, compared to what it might have coughed up just months ago shows no borrower is immune, writes Elly Whittaker.

Saudi Arabia will pay a margin of between 100bp-110bp for its loan of up to $10bn, according to a banker on the deal.

Rather than cherry picking its favourite banks for its $10bn sovereign loan, the Kingdom of Saudi Arabia will “pull together a handful of banks” to get the deal done, according to a banker in discussions with the sovereign.

You would think that a role in Saudi Arabia’s first loan in over two decades would be the golden ticket for any bank, but it’s not to everyone’s taste.

Saudi Aramco and China Petrochemical Corp (Sinopec) will complete the $4.7bn loan for their joint venture refinery within the next week, according to bankers.

Bankers pitching to lead the first loan for Saudi Arabia in more than 20 years say the borrower will tussle for tight pricing even though the Gulf’s other sovereigns and blue chips face further downgrades, write Elly Whittaker and Virginia Furness.

A swathe of ratings downgrades. one of which prompted Bahrain to first cancel a tap and then reprint it this week at a higher yield, is just one factor that will force Middle East sovereigns to pay up for bond funding just when they need it the most, writes Virginia Furness.

Saudi Arabia will likely issue its long anticipated debut dollar bond in dual sukuk and conventional format, according to bankers in the region.

A rally this week in crude oil has reduced short-term pressures, but exploration and production firms still face existential threats as liquidity and M&A odds worsen, said analysts.

Saudi Arabia’s central bank has told the country’s banks to stop selling options on riyal forwards — products which would let investors benefit if the value of the riyal falls.