Saudi Arabia is reportedly trying to cover a $21 billion deficit by selling bonds

• Saudi Arabia is increasing debt to plug holes in its finances, Bloomberg reported.

• Riyadh has moved forward with major spending projects as part of an economic diversification effort.

• It now needs to cover a fiscal deficit of US$21 billion, according to the vehicle.

Saudi Arabia plans to raise money through bond sales as it moves forward with massive spending projects, Bloomberg reported.

The kingdom will issue dollar-denominated three-, six- and 10-year sukuk notes as part of an effort to close a budget deficit expected to reach $21 billion by the end of the year, the media outlet reported citing an unnamed source.

Riyadh previously sold $12 billion in sovereign debt in January while planned desert megacity Neom I would also have thought Islamic bond issuance in an attempt to raise more money.

Citigroup, Goldman Sachs and French bank BNP Paribas will coordinate the bond sale, according to Bloomberg.

The latest bond sale comes as Saudi Arabia moves forward with Mohammed bin Salman’s Vision 2030 plan, which seeks to diversify its oil-dependent economy.

As part of the massive spending project, the kingdom plans to build Neom, which could cost up to US$1.5 trillion. It is also spilled billion dollars in sportsattracting football stars such as Cristiano Ronaldo, Karim Benzema and Neymar to play in the local Saudi Pro League and supporting the breakaway LIV Golf tournament.

In February, Wall Street Journal reported that Saudi Arabia has begun taking out loans to help finance Neom and other Vision 2030 “gigaprojects.”

Tim Callen, a visiting researcher at the Arab Gulf States Institute think tank in Washington, estimated that the Saudi sovereign wealth fund, the PIF, would need to raise an additional $270 billion if it wanted to fully realize its ambitions.

Read the original article at Business Insider