Saudi Arabia plans to sell $17.5 billion in its first bond offering, several media outlets report. It would make the Saudi bond issue the largest from an emerging-market nation, outpacing Argentina’s $16.5 billion offering in April.

The huge demand, larger than many market participants had expected, was partly due to ultra-low global interest rates and funds’ frustration with a lack of high-yielding assets around the world.

The issue eclipsed the previous record for an emerging market sovereign bond sale, a $16.5 billion issue by Argentina in April, Reuters reported.

New Saudi Arabian debt issuances consists of 5, 10, and 30-year maturity bonds, and are expected to trade at a 160-235 basis point premium to US Treasuries.

The offering followed a week of presentations to prospective buyers, taking in London, Los Angeles, Boston and New York, at which officials emphasized the kingdom’s efforts to diversify the $650 billion economy away from oil.

Further debt issuances are expected in the years ahead as Saudi Arabia and other countries in the Persian Gulf necessitate debt financing (or asset drawdown) to plug fiscal deficits.

The Saudi issue is expected to set a benchmark for the kingdom and pave the way for further international issues by the government in coming years, as well as bond sales by a string of big Saudi companies, Reuters added.

Saudi Arabia registered a budget shortfall of $97 billion last year, equal to 15 percent of its gross domestic product, prompting the government this year to cut subsidies, wages and spending.

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