Saudi Arabia Raises $9 Billion in First Islamic Bond Sale

The first international Islamic bond sale, known as sukuk, has generated $9 billion for Saudi Arabia. The sale comes as part of a Vision 2030 effort to transform the economic situation of the Kingdom away from oil dependence.

The Saudi Ministry of Finance said that investors placed orders in excess of $33 billion and added that bonds will be split equally between five and ten-year notes.

“The sukuk should cover about one-fifth of the expected fiscal deficit,” said an investor.

Bond Sale Helps Finance Saudi Economic Transformation

The Kingdom issued bonds worth $17.5 billion in 2016, tapping into international and domestic markets alike to help finance its budget deficit. The money from the sukuk is ultimately aimed at supporting Saudi Arabia’s finances as income from oil sales decreases.

Saudi Arabia is also preparing what’s widely expected to become the world’s largest initial public offering (IPO) of Saudi Aramco, the state oil company. The sale of the IPO is also expected to help manage the government’s budget.

Read the full story on Wall Street Journal.