Saudi Arabia launches dollar bond sale as Iran war squeezes oil revenues

Saudi Arabia returned to international debt markets on September 1 with a benchmark-sized dual-tranche dollar sukuk. Orders for the offering have already surpassed $9 billion. The five-year and 10-year tranches were marketed at initial pricing thoughts of roughly 100 and 110 basis points over US Treasuries, respectively. A borrowing spree driven by war economics The Iran conflict, which began in late February 2026, has upended Saudi Arabia’s revenue assumptions. Oil export disruptions contributed to a first-quarter budget deficit of 125.7 billion riyals, roughly $33.5 billion. The kingdom’s National Debt Management Center has been busy all year. In January, Saudi Arabia raised $11.5 billion through a multi-tranche bond sale. By May, the Public Investment Fund added another $7 billion in issuances. There are also ongoing efforts to secure an additional $8 billion in syndicated loans. Saudi Arabia’s total financing target for 2026 sits at approximately 217 billion riyals, or about $58 billion. That figure covers both new deficits and the rollover of maturing debt. Public debt-to-GDP has climbed to nearly 34%. Investor demand remains surprisingly resilient Gulf economies broadly are e...