Strong demand expected for Saudi global bond sale

JPMorgan Chase & Co., HSBC Holdings Plc and Citigroup Inc. have been appointed to arrange the international bond sale, says a Bloomberg report.
Updated 26 June 2016
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Strong demand expected for Saudi global bond sale

RIYADH: Saudi Arabia appointed JPMorgan Chase & Co., HSBC Holdings Plc and Citigroup Inc. to arrange its first international bond sale, people with knowledge of the matter said.

The banks are acting as global coordinators on the issue, according to the people, who asked not to be identified as the decision isn’t public.
More banks could be added later as joint lead arrangers and bookrunners on the deal, they said. Global coordinators have a key role in overseeing the deal while lead arrangers buy debt and sell it to other banks.
The decision on the mandates was made on Saturday night and the Kingdom will probably wait until after the summer before selling the bonds, two of the people said.
The Kingdom is preparing for a sale of at least $10 billion, separate people familiar said earlier this month.
HSBC, JPMorgan, Citi and Saudi Arabia’s Finance Ministry declined to comment.
Saudi Arabia is poised to join other countries from the GCC tapping foreign markets to plug budget deficits.
The Kingdom is shoring up its finances after crude prices slumped.
It plans to tap international debt markets as early as September, Minister of State Mohammed bin Abdul Malik Al-Sheikh said during a meeting between Bloomberg News and the Deputy Crown Prince Mohammed bin Salman in April.
“I expect the Saudi Arabia bond deal to be well received, albeit at a price,“  Anita Yadav, head of fixed-income research at Emirates NBD said by phone on Sunday.
“The hunt-for-yield in a world infected with negative rates will probably see good demand for a name like Saudi Arabia that has a strong credit rating and will likely offer attractive returns.”
In April, it sealed a $10 billion loan — its first in at least 15 years — from a group of US, European, Japanese and Chinese banks, people familiar with the matter said at the time.
The bond sale being considered now would probably come in five-, 10- and 30-year bonds once Ramadan ends next month, separate people with knowledge of the matter said earlier in June.
To cover a budget shortfall estimated at about $100 billion this year, Saudi Arabia has been selling local debt and drawing down foreign reserves as well as raising money on international capital markets.
It has also outlined an economic transformation plan that includes increasing government debt to 30 percent of economic output by 2020 from 7.7 percent.


Uber taps into Japan with first taxi-hailing pilot

Updated 14 min 56 sec ago
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Uber taps into Japan with first taxi-hailing pilot

TOKYO: Uber announced Tuesday it would start its first taxi-hailing pilot program in Japan this summer, as it bids to break into a tough market in the world’s third largest economy.
The US firm has found it difficult to penetrate the Japanese market, where risk averse passengers prefer to stick to their high quality traditional taxi service.
Hailing a taxi rarely takes more than a few seconds in major Japanese cities and there has been a relatively sluggish uptake of services like Uber, where consumers order an unlicensed car via a smartphone app.
But Uber said in a statement Tuesday it would launch a pilot program this summer to hook up tourists and residents in the western Awaji island with available taxi drivers.
Uber said it aimed to provide local residents and tourists with “reliable and safe transportation” on the small island, which is home to just over 150,000 people.
“I’m very excited that Uber’s technology will contribute to further enhancing the transit environment of Awaji Island,” Brooks Entwistle, Uber’s Chief Business Officer, said in the statement, adding it will be “the first initiative of its kind in Japan.”
Uber is far from alone in targeting the Japanese taxi market, with Chinese ride-hailing giant Didi Chuxing and Japanese telecom firm SoftBank announcing a deal in early February to develop a taxi app in Japan.
SoftBank has heavily invested in the taxi market and recently took a 15 percent stake in Uber.
And Sony has said it is planning a joint venture to offer artificial intelligence technology to six taxi operators, which currently own a total of 10,000 vehicles in Tokyo.
The technology would use AI to predict demand for taxis and allow companies to more efficiently mobilize their resources.
Carmaker Toyota has also announced an investment of ¥7.5 billion in the JapanTaxi app, which says it is the biggest taxi-hailing app in Japan.