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Saudi Said to Seal $10 Billion Loan to Fill Budget Hole

  • Loan is good way of testing waters before bond sale: Malik
  • Size of facility boosted after overwhelming investor demand
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Saudi Arabia sealed its first loan in at least 15 years as it seeks to fill a budget hole estimated at about $100 billion this year, three people with knowledge of the matter said.

The government will pay lenders about 120 basis points above the London interbank offered rate, including margin and fees, for the $10 billion facility, the people said, asking not to be identified as the information is private. The loan will have a tenor of five years and should be signed before the end of April, the people said. Qatar raised a $5.5 billion five-year loan priced at 90 basis points above Libor in December.