• 4 minutes 2nd Annual Great Oil Price Prediction Challenge of 2019
  • 7 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 10 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 13 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 7 mins The 5 Scary New Rules Of Upside-Down Capitalism
  • 3 hours Hydrogen Hurdles in Japan
  • 6 hours Winter Storms Hitting Continental US
  • 7 hours U.S. Shale To Break Records Despite Bearish Rhetoric
  • 1 day More dumbed down? re Hong Kong Act of Congress
  • 18 hours PennEast Appealing Wacky 3rd Circuit Decision to Supreme Court
  • 21 hours Impeachment S**te
  • 2 hours Pope Proposes New Sin: Thou Shalt Not Destroy The Harmony Of The Environment
  • 1 day Petroleum Industry Domain Names
  • 19 hours Contaminated Oil
  • 19 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 1 day U.S. Shale Output may Start Dropping Next Year
  • 16 hours Aramco IPO magic trick
  • 1 day Crazy Stories From Round The World
  • 19 hours Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

Saudis Turn To Capital Markets For $10 Billion Loan

Saudi Arabia is seeking a $10 billion loan from international banks, according to Reuters, which represents the country’s first major loan in more than a decade.

The Saudi government is hoping to discuss the matter with several unnamed banks, and while the amount was also not disclosed, a source told Reuters that it could top $10 billion. Related: In Risky Move Wall St. Backs Shale With Nearly $10 Billion In Equity

To be sure, Saudi Arabia has a massive pile of foreign exchange that will allow it to weather the oil price downturn for years, although few expect oil prices to remain below $40 for that long. Still, the Saudi government surely does not want to burn through all of its cash reserves. In fact, Saudi reserves dropped below $600 billion for the first time in almost four years. The OPEC member burned $14.3 billion in January, the third month in a row that it used more than $10 billion. Is recently as the summer of 2014, Saudi Arabia’s foreign exchange sat well above $700 billion.

With oil prices so low, Saudi Arabia estimated in late 2015 that it ran a budget deficit of $98 billion for the year. The trajectory is unsustainable. S&P downgraded Saudi Arabia’s credit by two notches in February, from A+ to A-. Related: The U.S. Still Dominates World Oil Prices

It now appears that the Saudi government wants to turn to international lenders to help plug the budget hole. As one of the world’s largest oil producers with a huge war chest of cash reserves, Saudi Arabia shouldn’t have trouble finding any lenders. Not only that, but Reuters says that banks might be eager to lend to Saudi Arabia because it could improve their chances of being selected to conduct the bond offering that Saudi Arabia is planning on holding later this year.

Still, borrowing costs will likely be much higher than what would have been offered a year or two ago. For example, Qatar took a $5.5 billion loan from international lenders in January, much lower than the expected $10 billion that was anticipated, reportedly because the offered interest rates were too high.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • Brett Miller on March 03 2016 said:
    Really? That's like saying my business has $600,000 in the bank but I want to borrow $10,000. And I have the ability to manipulate my business market sector such that I could increase my revenue stream per unit by 200% to 300% any time I want. Talk about having your cake and eating it too!

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play