Saudi Arabia to raise around $31bn in debt this year

State-owned Aramco is expected to issue bonds soon. (AFP/File)
Updated 31 March 2019

Saudi Arabia to raise around $31bn in debt this year

  • Saudi Arabia’s debts have increased recently after drop in oil prices
  • Saudi Aramco is expected to issue its first international market bonds in the coming days

DUBAI: Saudi Arabia plans to issue $31.5 billion in debt this year to help finance the national budget deficit, the country’s Debt Management Office (DMO), part of the ministry of finance, said.
Saudi Arabia has borrowed extensively over the past few years to refill state coffers depleted by a drop in oil prices.
At the end of 2018, it had around $150 billion in outstanding government debt, 54 percent of which was in local currency and the rest denominated in US dollars.
The kingdom issued $7.5 billion in international bonds in January. It said its foreign funding this year “would be positioned in a way in which (Saudi Arabia) could secure most of its funding in the first quarter,” to reduce exposure to market risks and to allow Saudi government-related issuers to tap the debt markets.
The statement comes a few days before Saudi Aramco, the state-owned oil giant, is expected to issue its first bonds in the international markets.
Saudi Arabia’s deficit funding requirements for this year are estimated at $35 billion, which will be funded with an approximate net debt issuance of $31.5 billion, while the rest will come from government deposits at the central bank, the DMO statement said.
By the end of 2019, Saudi Arabia plans to have around $181 billion in outstanding debt, corresponding to 21.7 percent of gross domestic product.
The DMO said this year it would try to “contain” the government’s outstanding debt exposure to interest rate risk by reducing the percentage of floating-rate instruments in its portfolio.
At the end of 2018, 73 percent of Saudi debt issues had a fixed rate and 27 percent had a floating rate. By the end of 2019, the government wants to increase fixed-rate debt to 78 percent of its portfolio.


Qatar Airways expects to keep Airbus A380s parked for years

Updated 19 October 2020

Qatar Airways expects to keep Airbus A380s parked for years

  • State-owned airline parked its 10 A380s due to the devastating impact of the coronavirus crisis on travel demand
  • Qatar Airways boss Akbar Al-Baker criticizes rivals operating the A380 as ‘foolish’

DUBAI: Qatar Airways does not expect to use its Airbus A380s for at least the next two years, its chief executive said on Monday, longer than a previous projection for the superjumbos to possibly return to service in 2021.
The state-owned airline has parked its 10 A380s due to the devastating impact of the coronavirus crisis on travel demand.
“We don’t think we are going to operate our A380s for at least the next couple of years,” Akbar Al-Baker told an online conference.
He had said in June the jets would remain parked until at least the middle of next year. The Gulf carrier plans to start retiring its A380s from 2024 when its oldest superjumbo reaches ten years of service.
The A380s would return once the airline saw the growth rate of 2019, before the pandemic struck, Baker said.
The 100 destinations to which the airline is currently flying is 25 fewer than planned due to a new wave of infections in Europe and travel restrictions, he said.
Baker criticized rivals operating the A380 as “foolish,” saying there was insufficient demand and so prices would be driven down.
Air France retired its A380s this year, while British Airways and Qantas retired their Boeing 747s as the crisis sent air travel into free fall.
Gulf carrier Etihad Airways is mulling whether its parked A380 fleet will ever return, while Emirates, the largest superjumbo operator, has resumed some services with the jet.