Saudi Arabia to go to global bond market for first time

Nov 12, 2015 (LBO) - Saudi Arabia will go to international bond markets for the first time next year due to low oil prices cramping government revenues, a media report said. Debt levels could increase to as much as 50 percent of GDP in five years from 6.75 percent this year with this borrowing programme, some officials said. Pushing oil prices from 115 dollars per barrel last year to below 50 dollars per barrel, Saudi Arabia is leading an OPEC charge against non-OPEC oil producers, especially shale oil producers in the US. The OPEC price war was expected to deal a knockout blow to shale oil producers and check growth of renewables such as solar and wind power, but shale oil producers have been surprisingly resilient. Standard & Poor’s last month reduced Saudi Arabia’s ratings from ‘AA-/A-1+’ to ‘A+/A-1’, over the finance deficit which the kingdom’s finance ministry described as “unjustified.”