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Saudi Arabia Comes Back to Bond Market With a $2.5 Billion Sukuk

  • Kingdom sets spread guidance on debt at 145-150 basis points
  • JPMorgan, Standard Chartered, Aljazira Capital managing sale
A video screen promotes entertainment industry opportunities during the Joy Forum in Riyadh, Oct. 14.

A video screen promotes entertainment industry opportunities during the Joy Forum in Riyadh, Oct. 14.

Photographer: Faisal Al Nasser/Bloomberg

Saudi Arabia is seeking to raise $2.5 billion of Islamic bonds as the world’s biggest oil exporter takes advantage of borrowing costs that are around the lowest in four years.

The kingdom’s government set initial price guidance for a 10-year sukuk at between 145 basis points and 150 basis points over the benchmark midswap rate, according to a person familiar with the deal who asked not to be identified because the information is private. Saudi Arabia’s $4 billion of securities due in April 2029 closed at a spread of 125 basis points on Monday, according to data compiled by Bloomberg.