Saudi Arabia to raise $11 billion from syndicated loan to help fund deficit, Bloomberg reports

Saudi Arabia raised $11 billion through a joint loan as it sought to finance the budget deficit amid weak oil revenues, according to “Bloomberg.”

The 10-year loan was financed by a group of banks, including Industrial and Commercial Bank of China, Citigroup, First Abu Dhabi Bank, and HSBC Holdings,” people familiar with the matter told “Bloomberg.”

“The loan’s interest margin was 100 basis points above the standard one-night guaranteed financing price standard, known as SOFR,” people familiar with the matter said.

A spokesman for the Saudi Ministry of Finance did not immediately respond to requests for comment.

Saudi Arabia revised its fiscal forecast and likely recorded an annual fiscal deficit from 2023 to 2026, according to the medium-term budget forecast published in October.

The deficit comes amid weaker-than-expected oil prices, lower production since May, and higher government spending, with the kingdom spending hundreds of billions of dollars on a diversification campaign known as “Vision 2030,” led by Crown Prince Mohammed bin Salman.