(Bloomberg) -- China has picked banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. to help sell its first dollar bonds since 2021, according to people familiar with the matter.
The sale of up to $2 billion will take place in Saudi Arabia’s capital, Riyadh, and likely happen next week, Bloomberg reported on Tuesday.
The move is emblematic of China’s deepening financial ties with Saudi Arabia, the biggest economy in the Middle East, and signals Beijing’s backing for the kingdom’s ambitions to become a magnet for investment.
The Chinese Ministry of Finance has hired several banks to manage the issuance of three- and five-year debt, said the people. The group also includes Bank of America, Bank of China, Deutsche Bank AG, HSBC Holdings Plc, Industrial and Commercial Bank of China, Standard Chartered Plc and First Abu Dhabi Bank PJSC.
Saudi Arabia is an unusual venue for selling dollar notes, with London, New York and Hong Kong normally being picked for such transactions.
Over the last two decades, China’s dollar-denominated sovereign bonds were issued in Hong Kong, according to data compiled by Bloomberg.
According to a bond-offering document seen by Bloomberg, the debt will trade on Nasdaq Dubai and be listed on the Hong Kong exchange.
Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman, is spending trillions of dollars to diversify his economy from oil, with massive investments in everything from artificial intelligence to electric vehicles and Red Sea tourism resorts. Attracting more foreign investment is crucial to his goals.
Even so, oil remains crucial to Saudi-Chinese relations. China is the biggest buyer of Saudi crude and the kingdom is investing billions of dollars in Chinese oil and petrochemical refineries.
Mutual investments between the two countries have increased since Chinese President Xi Jinping’s 2022 visit to Riyadh.
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