| Submit your comments on this article |
| Arabia |
| Saudi Arabia Seeks $6-8 billion Loan to Shore up State Budget |
| 2016-03-11 |
| [ALMANAR.LB] Soddy Arabia ...a kingdom taking up the bulk of the Arabian peninsula. Its primary economic activity involves exporting oil and soaking Islamic rubes on the annual hajj pilgrimage. The country supports a large number of princes in whatcha might call princely splendor. When the oil runs out the rest of the world is going to kick sand in the Soddy national face... is seeking a bank loan of between $6 billion and $8 billion in what would be the first significant foreign borrowing by the kingdom's government for over a decade. Riyadh has asked lenders to submit proposals to extend it a five-year US dollar loan of that size, with an option to increase it, in order to help plug a record budget deficit caused by low oil prices. The sources declined to be named because the matter is not public. Last week, Rooters reported that Saudi Arabia had asked banks to discuss the idea of an international loan, but details such as the size and lifespan were not specified. The kingdom's budget deficit reached nearly $100 billion last year. The government is currently bridging the gap by drawing down its massive store of foreign assets and issuing domestic bonds. But the assets will only last a few more years at their current rate of decline, while the bond issues have started to strain liquidity in the banking system. London-based boutique advisory firm Verus Partners, set up by former Citigroup bankers Mark Aplin and Andrew Elliot, is advising the Saudi government on the loan, the sources said. The firm has sent requests for proposals to a small group of banks on behalf of the Saudi Ministry of Finance, the sources said. They added that banks participating in the loan would have a better chance of being chosen to arrange an international bond issue that Saudi Arabia may conduct as soon as this year. Analysts say sovereign borrowing by the six wealthy Gulf Arab oil exporters could total $20 billion or more in 2016 - a big shift from years past, when the region had a surfeit of funds and was lending to the rest of the world. All of the six states have either launched borrowing programs in response to low oil prices or are laying plans to do so. With money becoming scarcer at home, Gulf companies are also expected to borrow more from abroad. In mid-February, Standard & Poor's cut Saudi Arabia's long-term sovereign credit rating by two notches to A-minus. The world's other two major rating agencies still have much higher assessments of Riyadh, but last week Moody's Investors Service put Saudi Arabia on review for a possible downgrade. |
| Posted by:Fred |
| #22 And speaking of natural gas, check out THIS ARTICLE. |
| Posted by: Alaska Paul 2016-03-11 17:46 |
| #21 Barack to BEP "Start the presses". |
| Posted by: g(r)omgoru 2016-03-11 16:45 |
| #20 ...you didn't get the message, it's exportable now. |
| Posted by: Procopius2k 2016-03-11 15:08 |
| #19 Meanwhile, here in the Puget Sound area, gas prices have jumped more than 10 cents in the last week. Where is all that over production going? |
| Posted by: USN, Ret. 2016-03-11 14:31 |
| #18 gorb, don't forget Russia. |
| Posted by: Sven the pelter 2016-03-11 14:09 |
| #17 ...no problem. Just sell the assets to foreigners then after collecting the money, just nationalize them. They'll come back. Watch whats happening with Cuba now. |
| Posted by: Procopius2k 2016-03-11 13:14 |
| #16 If they start to cut their welfare state then they face unrest at home. They've already started cutting subsidies on a variety of things loke utilitiy bills and gasoline, Alaska Paul. As I recall, they only have reserves to cover five years of expenses at the current oil price before they have to start selling off assets. So reducing expenses has already begun. |
| Posted by: trailing wife 2016-03-11 12:44 |
| #15 Keeping oil prices low is a good way to starve Iran until they burn through the $150B that 0bean gave them for nothing in return. And starve Maduro into submission. And ISIS. I guess we owe the Saudis here. Cheap by comparison. |
| Posted by: gorb 2016-03-11 12:25 |
| #14 Baraq gives 'em $10 billion of the taxpayers' money and they give him a couple million for his library. |
| Posted by: Ebbang Uluque6305 2016-03-11 12:17 |
| #13 Given the present political climate in the USA I cannot visualize an American bank initiating a loan with Saudi Arabia if it values its reputation. Did you see the piece about how Chase isn't going to provide credit for coal plants in the US anymore? Only in "underdeveloped countries" or whatever phrase they used. |
| Posted by: Thing From Snowy Mountain 2016-03-11 11:44 |
| #12 My reaction to this is "Fuck them." |
| Posted by: Crusader 2016-03-11 11:04 |
| #11 I can see Obumble and others that are tight with the Saudis running to "save" them. Once the oil empire collapses in the Middle East things will get really interesting, really quick. |
| Posted by: DarthVader 2016-03-11 11:03 |
| #10 You don't think Champ will try to buy favors by lending out $10 billion of our grandchildren's future? To build his "Legacy". |
| Posted by: Bobby 2016-03-11 10:57 |
| #9 15 of the 19 911 hijackers were Saudis. The Individuals and charities based in Saudi Arabia financed al-Qaeda while Saud officials turned a blind eye. The Saudis have financed and spread Wahhabism which is full of hatred aimed at the West. They have raped the West via OPEC for decades. A $6-8 billion loan to support the state budget--screw em. We are not in the best of shape to finance anyone's budget thanks to our elite betters in Washington (sarc). |
| Posted by: JohnQC 2016-03-11 10:55 |
#8 
| |
| Posted by: Snoque Guelph8086 2016-03-11 10:43 |
| #7 Let me know when they're eating sand, and posting pictures of starving Saudi children. |
| Posted by: Spinesing Gray3122 2016-03-11 10:41 |
| #6 Given the present political climate in the USA I cannot visualize an American bank initiating a loan with Saudi Arabia if it values its reputation. |
| Posted by: Bugs Unaviper5548 2016-03-11 09:46 |
| #5 The only thing worse than economic collapse would be if Iran could get a Nuc. Thankfully that can't happen. |
| Posted by: BrerRabbit 2016-03-11 08:34 |
| #4 So it begins. Where's the graphic with the money swirling down the drain? I looked. |
| Posted by: Bobby 2016-03-11 08:20 |
| #3 I would like to see this turn into a long term retrenchment where KSA withdraws from all of its expensive subvertiing in the wider world and withdraw into a quaint local tribe and take the rest of the sheikdoms with them. |
| Posted by: AlanC 2016-03-11 07:43 |
| #2 And with other gulf states in the same boat, they are doomed to a steady decline towards bankruptcy if prices hold. If they decrease production then others will increase production. If they start to cut their welfare state then they face unrest at home. This is most interesting. Every disaster is a new opportunity. |
| Posted by: Alaska Paul 2016-03-11 01:07 |
| #1 Am I imagining things or what? Saudis being hoisted by their own petard? Dropped the price of crude by pumping at max to hurt American frackers and others. Low prices sustained because Iran now back in the market. So to keep up the welfare state the Saudis sell assets to make up difference between lower revenues and expenses. Now they need a bridge loan while they try to sell assets in an orderly way to avoid taking a financial bath. This veddy interesting. A source of innocent merriment if true. |
| Posted by: Alaska Paul 2016-03-11 00:43 |