Saudi T-Bill Yields Little Changed at Sale After Succession

Saudi Arabia treasury-bill yields were little changed at an auction today as the kingdom completed a smooth succession after the death of the crown prince.

The yield on the one-year notes was 0.57304 percent compared with 0.57403 percent at last week’s sale, according to data compiled by Bloomberg. The yield on the three-month and six-month notes were little changed at 0.37380 percent and 0.44975 percent respectively, the data show. The one-week and one-month bill yields were unchanged at 0.11366 percent and 0.20215 percent.

King Abdullah appointed on June 18 Prince Salman bin Abdulaziz, his defense minister and half brother, as crown prince after Prince Nayef Bin Abdulaziz Al Saud died in Geneva.

Borrowing costs in Saudi Arabia have risen this year as lending picked up. The three-month Saudi interbank average offered rate, the reference rate used by banks to price loans, has climbed 15 basis points this year to 0.92875 percent today, the highest since May 2009, according to data on Bloomberg. The rate’s spread over the three-month London Interbank Offered Rate has more than doubled in the period to 47 basis points.

Loans to private businesses in the kingdom grew 13.4 percent in April from the year earlier, the fastest pace in three years, after the world’s biggest oil exporter announced more than $500 billion of projects, according to central bank data.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net