Debut euro bond ‘highlights Kingdom’s market strength’

Finance Minister Mohammed Al-Jadaan said the euro-denominated issue comes as part of efforts by the PDMO to provide the Kingdom with the best possible short, medium and long-term financing costs. (Reuters)
Updated 04 July 2019

Debut euro bond ‘highlights Kingdom’s market strength’

  • Mohammed Al-Jadaan: ‘Some of the advantages of the euro bond offering by the Kingdom are to increase investor diversification, as some investors invest only in the euro currency’
  • Al-Jadaan: ‘The high demand showed that Saudi Arabia’s economic strength enables it to enter markets at any time and, in the long term, to diversify sources of funding’

RIYADH: The successful pricing of Saudi Arabia’s first euro-denominated bond confirms the Kingdom’s leading position in regional and international stock markets, Finance Minister Mohammed Al-Jadaan said.

Al-Jadaan said the euro-denominated issue — part of the Saudi Arabia’s international program for issuing debt instruments — comes as part of efforts by the Public Debt Management Office (PDMO) to provide the Kingdom with the best possible short, medium and long-term financing costs with risks consistent with its financial policies.

These policies aim to optimize state assets and innovative financing, as well as ensure the Kingdom’s access to international markets and fair pricing, he said.

The minister said the PDMO has received subscription applications in excess of €13.5 billion ($14.7 billion), highlighting strong demand from investors in the EU, as well as the confidence European investors have in the Saudi government’s securities.

The PDMO managed to narrow the range of pricing until it reached a steady yield of 0.78 percent in the eight-year segment and 2.04 percent in the 20-year segment, Al-Jadaan added.

“Some of the advantages of the euro bond offering by the Kingdom are to increase investor diversification, as some investors invest only in the euro currency,” he said. “The high demand showed that Saudi Arabia’s economic strength enables it to enter markets at any time and, in the long term, to diversify sources of funding.”

Al-Jadaan said that the PDMO at the Finance Ministry carried out a promotional campaign in eight European cities  — London, Paris, Milan, Frankfurt, Amsterdam, the Hague, Zurich and Munich — that included several meetings during which 77 European investors were interviewed.

The total amount of the offering was €3 billion, divided into two tranches as follows: €1 billion for eight-year bonds maturing in 2027, and €2 billion for 20-year bonds maturing in 2039.

Welcoming the decision, leading Saudi economist Talat Zaki Hafiz said: “I believe it is prudent action from the Saudi government to raise bonds in different currencies.”

He said tapping new debt markets will serve the Kingdom’s interest in terms of competitiveness — pricing, and terms and conditions — as well as satisfying its financial needs.

On the likelihood of new bond issue, Hafiz said it will depend on the government plan to finance any deficit in its budget.

“If the intention of the government (is) to borrow, it still can do so due to its excellent credit ratings and the low debt/GDP ratio, the lowest among the G20 members,” Hafiz said.

Talat said that investor appetite for Saudi bonds is high.

“The international debt markets have always valued, greatly appreciated and welcomed investing in Saudi Arabia’s bonds due to its excellent credit ratings announced by reputable international credit agencies, such as Fitch and S&P,” he said.


Saudi female student pilot aims high with flying ambitions

Updated 19 November 2019

Saudi female student pilot aims high with flying ambitions

  • Amirah Al-Saif is among the first batch of 49 female students

DUBAI: Saudi women aiming to emulate Yasmeen Al-Maimani’s feat, the Kingdom’s first female commercial pilot, now have that opportunity as Oxford Aviation Academy has opened its doors for them to take flying lessons and earn their licenses.

One those women raring to earn her pilot wings is 19-year-old Amirah Al-Saif, who enrolled in the aviation academy to fulfill her dream of flying for the Kingdom’s national carrier Saudi Airlines (Saudia).

“They have been very supportive of us females,” Al-Saif, who hails from Riyadh, told Arab News at the sidelines of the Dubai Airshow, when asked about her experience at the academy.

Al-Saif is among the first batch of 49 female students, with six of them already in ground school, expected to receive their licenses by the start of 2021 after a grueling course that requires them to first learn English, Mathematics, Physics and other basic knowledge subjects.

She is also the first in the family to have an interest in the aviation industry.

Student pilot Amirah Al-Saif, right, who hails from Riyadh, is the first in the family to have an interest in the aviation industry. (Supplied)

Those who pass the foundation program can then move on to ground school for practical lessons and ideally graduate in two years with three licenses: the Private Pilot License, Instrument Rating and Commercial Pilot License.

Al-Saif considers herself lucky since she was not constrained take courses abroad for her pilot training, unlike Al-Maimani who had to leave the Kingdom to receive her license, as well as wait for a long time before being eventually hired by Nesma Airlines.

The flying school is located at the King Fahd International Airport in Dammam and is an authorized branch of Oxford Aviation Academy based in the UK.

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