Saudi Debt Risk on Par With Junk-Rated Portugal as Oil Slides
- Kingdom's credit-default swaps climb to the highest since 2009
- Brent crude retreats below $35 a barrel to a 2004-low
Vehicle light trails pass the Kingdom Tower on King Fahad Road in Riyadh, Saudi Arabia.
Photographer: Waseem Obaidi/BloombergThis article is for subscribers only.
Investors wanting to take out insurance on Saudi Arabia’s debt have to pay as much as they would for Portugal, a nation still saddled with a junk credit-rating five years after an international bailout.
The cost of insuring the kingdom’s debt more than doubled in the past 12 months to a 190 basis points, or $190,000 annually to insure $10 million of the country’s debt for five years, as of 4:14 p.m. in Riyadh, the highest since April 2009, according to CMA prices compiled by Bloomberg. That’s almost identical to contracts linked to debt from Portugal, whose rating is seven levels below Saudi Arabia’s Aa3 investment grade at Moody’s Investors Service.