Saudi Arabia

Saudi Arabian asset prices failed to bounce back this week after last weekend’s high profile arrests, even though wider emerging markets staged a late recovery.

Emirates NBD’s recent new issue has recovered some of the losses reported on Wednesday, though still remains below reoffer as emerging market debt bounces back after a tough couple of days.

Saudi asset prices dropped on Monday after the arrest of senior officials on Saturday caught the market off guard, prompting a 2.2% fall in the Tadawul index and leaving investors nervously awaiting further developments.

Saudi Electricity Co’s $1.75bn loan has been successfully sold down to four other banks.

Dubai Aerospace Enterprise (DAE) Capital has financed an Airbus A320-200 aircraft for Saudi Arabian Airlines’ low-cost carrier ‘flyadeal’ with a loan from Bank ABC.

Shares in Hapag-Lloyd, the German container shipping line, are holding up well as the subscription period for its €352m rights issue begins.

Intercontinental Exchange (ICE), an operator of exchanges and clearing houses, on Monday announced clearing services for CDS referencing Saudi Arabia, as well as for a host of emerging market and Asia-Pacific corporate single names.

Saudi Arabia does not come to market often, but when it does, it does so in size — as this week’s $12.5bn sale proved. In the last 12 months, the Gulf state has raised more in dollar or euro syndications than any other sovereign. The issuer has shown remarkable commitment to weaning its economy off petrodollars as it enlists capital markets to help it plug a $53bn deficit, writes Virginia Furness.

Saudi Arabia cut through rising swap spreads on Wednesday to print its third jumbo transaction, bringing its funding efforts to $39bn over 12 months. The issuer kept the buyside sweet with around a 10bp new issue concession, and all three tranches were tighter in the secondary market on Thursday.

Saudi Arabia is having a good week — finally allowing women to drive, albeit not until June 2018, and bookbuilding for a third jumbo international bond. But investors are praying the sovereign does not step on the accelerator too hard and leaves some spread on the table to ensure performance, after a poor week for EM new issues.

EM investors are nervous: only one of the new emerging market sovereign bonds issued in the last two weeks is trading above par and now Saudi Arabia has opened books on what is likely to be a third jumbo transaction.

Saudi Arabia will return to the international capital markets this year and has named leads for a triple tranche conventional bond.