Saudi Arabia is in talks to raise as much as $10 billion through a rare syndicated loan, Bloomberg reported, marking the latest step in the kingdom’s efforts to secure funding for Crown Prince Mohammed bin Salman’s ambitious economic diversification agenda.
The Saudi Ministry of Finance is engaging with major global banks, including leading Wall Street lenders, according to people familiar with the matter who requested anonymity because the discussions are private. No final decisions have been made, and the kingdom could ultimately abandon the plan if market conditions prove unfavorable or if the pricing does not meet expectations, the sources said.
Saudi Arabia has historically relied on bond sales to raise capital and is currently one of the most active sovereign issuers in emerging markets. The country has already raised nearly $20 billion in debt this year, approaching its 2017 record for full-year issuance. Sovereign loans by the kingdom are comparatively infrequent, though at least two transactions exceeding $10 billion have taken place since 2016, according to data compiled by Bloomberg. The finance ministry did not respond to a request for comment, but officials have previously stated that the government is exploring alternative financing methods to diversify its funding sources.
Last week, Saudi Arabia projected a 2025 budget of $65 billion, more than double its previous forecast, as public spending continues to rise while revenues lag behind expectations. Before the revision, Riyadh had planned to borrow around $37 billion this year, primarily through capital markets, with roughly 30% sourced from private funding channels.
Analysts say a greater portion of future borrowing may shift toward non-market sources. In a report released Friday, Fitch Ratings noted that Saudi Arabia’s expanding financing needs and elevated debt levels could increase borrowing costs if the government continues to rely heavily on bond markets.
Despite fiscal pressures from lower oil prices and high domestic spending, Saudi institutions remain active in pursuing large-scale investments. The Public Investment Fund, the kingdom’s sovereign wealth vehicle, was the largest contributor to the $36 billion in equity financing that backed last month’s landmark buyout of Electronic Arts Inc., Bloomberg reported. The pursuit of this new loan underscores Riyadh’s continued drive to fund transformative projects central to Vision 2030, the crown prince’s blueprint for economic modernization and reduced oil dependency.
