Saudi Arabia is set to raise a $10bn international bank loan, its first since 1991. The five-year loan will be lead-managed by Bank of Tokyo-Mitsubishi, HSBC and JP Morgan and is expected to be finalized by the end of April, Bloomberg reports. Initially Saudi Arabia was said to be looking to borrow $6-8bn, but the Ministry of Finance raised the amount to $10bn after encountering strong demand for new sovereign debt from US, EU, Japanese and Chinese banks.
Fitch Ratings says the loan plan reflects “the pressure on the kingdom’s fiscal balances caused by lower oil prices.” This contributed to the agency’s sovereign downgrade to AA- (negative outlook) from AA (negative) earlier this month. Rival agency S&P downgraded Saudi Arabia by two notches in February (MEES, 19 February), while Moody’s has Saudi Arabia and a slew of other oil producers on review for a downgrade (MEES, 11 March). (CONTINUED - 359 WORDS)
