Saudi Arabia has completed the issuance of bonds worth $12 billion, as the kingdom continues to tap international debt markets to raise money amid economic transformation plans.
The total order book for the three-tranche bond – valued at $5 billion, $3 billion and $4 billion – reached $37 billion, with an oversubscription of three times of the total offering, the National Debt Management Centre said in a statement on Tuesday.
“This transaction is part of NDMC's strategy to diversify the investors' base and meet the kingdom's financing needs from international debt capital markets efficiently and effectively,” NDMC said.
“The bid-to-cover ratio reflects the strong demand of the kingdom's issuances, confirming the investors' confidence in the strength of the kingdom's economy and its investment opportunities future.”
There is scope for further borrowing, according to Ralf Wiegert, head of Mena Economics at S&P Global Market Intelligence.
The Saudi government “still has room for more borrowing in the next two to three years before more difficult decision have to be taken, such as cutting back spending for one of the mega-projects or for investments in facilities related to the sports events that will take place in Saudi Arabia in the next 10 years”, he told The National.
The latest offering comes after Saudi Arabia this week approved the annual borrowing plan for the fiscal year 2025, with funding needs for the year estimated at 139 billion Saudi riyals ($37 billion), including covering the anticipated budget deficit of 101 billion riyals and to repay principal debt amounting to 38 billion riyals.
Last week, the kingdom also announced that it raised $2.5 billion from three foreign banks to finance its budgetary needs.
The Public Investment Fund also plans to raise $7 billion from its first murabaha credit facility to diversify its funding sources to boost investments, it said on Monday. The financing is part of the sovereign wealth fund's medium-term capital-raising strategy.
“The current issuance was in US dollars, however, we would not be surprised if they looked to diversify their subsequent borrowing in other currencies to diversify their sources of funds. Their strong credit rating and the recent upgrade by Moody’s would help the kingdom raise money at favourable rates,” Chiro Ghosh, vice president of financial institutions at Bahrain-based Sico Bank, told The National.
“After the issuance, Saudi Arabia’s public sector debt would still be less than 30 per cent of its gross domestic product, which is a very favourable matrix relative to most of its global peers.”
In November, global credit ratings agency Moody’s Investors Service upgraded Saudi Arabia’s rating to “Aa3" from “A1”, with a stable outlook as the kingdom continues to focus on diversifying its economy and boost its non-oil sector.
“Over time, these advancements are expected to reduce Saudi Arabia's exposure to oil market developments and long-term carbon transition on its economy and public finances.” Moody’s said at the time.
The ratings agency expects the non-oil private sector GDP of Saudi Arabia to expand 4 per cent to 5 per cent in the coming years, positioning it among the highest in the GCC region.
Economic transformation
Saudi Arabia, the Arab world’s largest economy, is undergoing a massive economic transformation, as part of vision 2030 programme, with new projects in infrastructure, tourism, real estate and other sectors.
It is building the $500 billion Neom project at the Red Sea, featuring residential buildings and tourist attractions, as well as undertaking new projects in Riyadh.
Opec’s top oil exporter is also hosting Fifa World Cup in 2034 and Expo 2030, which requires massive funding to build new facilities and venues as thousands of people are expected to visit the kingdom during the two mega events.
2025 forecast
The International Monetary Fund projects Saudi Arabia’s economy to expand 4.6 per cent this year, after a projected growth of 1.5 per cent in 2024.
“The government aims to focus on strategic spending in 2025, with mega-projects like the Neom city already under way, along with priority investments like the Asian Games in 2027 and the recently announced Fifa World Cup in 2034,” Vijay Valecha, chief investment officer at Century Financial, said.
Saudi Arabia requires oil prices to be more than $90 a barrel to balance its finances, he added, citing IMF data.
“With the Brent prices trading around $76 per barrel, the Saudi government’s budget is forecast to remain in deficit for the next few years. This indicates to the kingdom’s need to rely more on external borrowing to fund its mega-projects,” Mr Valecha said.
MATCH RESULT
Liverpool 4 Brighton and Hove Albion 0
Liverpool: Salah (26'), Lovren (40'), Solanke (53'), Robertson (85')
Prop idols
Girls full-contact rugby may be in its infancy in the Middle East, but there are already a number of role models for players to look up to.
Sophie Shams (Dubai Exiles mini, England sevens international)
An Emirati student who is blazing a trail in rugby. She first learnt the game at Dubai Exiles and captained her JESS Primary school team. After going to study geophysics at university in the UK, she scored a sensational try in a cup final at Twickenham. She has played for England sevens, and is now contracted to top Premiership club Saracens.
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Seren Gough-Walters (Sharjah Wanderers mini, Wales rugby league international)
Few players anywhere will have taken a more circuitous route to playing rugby on Sky Sports. Gough-Walters was born in Al Wasl Hospital in Dubai, raised in Sharjah, did not take up rugby seriously till she was 15, has a master’s in global governance and ethics, and once worked as an immigration officer at the British Embassy in Abu Dhabi. In the summer of 2021 she played for Wales against England in rugby league, in a match that was broadcast live on TV.
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Erin King (Dubai Hurricanes mini, Ireland sevens international)
Aged five, Australia-born King went to Dubai Hurricanes training at The Sevens with her brothers. She immediately struck up a deep affection for rugby. She returned to the city at the end of last year to play at the Dubai Rugby Sevens in the colours of Ireland in the Women’s World Series tournament on Pitch 1.
MATCH INFO
Argentina 47 (Tries: Sanchez, Tuculet (2), Mallia (2), De La Fuente, Bertranou; Cons: Sanchez 5, Urdapilleta)
United States 17 (Tries: Scully (2), Lasike; Cons: MacGinty)
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
Abu Dhabi GP schedule
Friday: First practice - 1pm; Second practice - 5pm
Saturday: Final practice - 2pm; Qualifying - 5pm
Sunday: Etihad Airways Abu Dhabi Grand Prix (55 laps) - 5.10pm
match info
Chelsea 2
Willian (13'), Ross Barkley (64')
Liverpool 0
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Our family matters legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
