Exxon's CEO Comments Not Good News For Saudi Arabia -- October 20, 2016

Reported earlier:

Saudi Arabia to offer international investors $17.5 billion in bonds: Gulf countries are increasingly raising funds through international markets -- The Wall Street Journal. 

Saudi Arabia plans to raise up to $17.5 billion by selling bonds for the first time to international investors this week, two people aware of the transaction said Wednesday.

The kingdom also tightened its pricing guidance for the potential multi-tranche issue, which along with the estimated issue size reflects a strong appetite for the potential issue, bankers say.

For the five-year tranche, Saudi Arabia said it would pay around 1.4 percentage points above U.S. Treasurys, compared with an initial guidance of around 1.6 percentage points above U.S. Treasurys.

Reported earlier:

Data points at Bloomberg:

• central bank pledge of $5.3 billion failed to ease liquidity crunch
• the interest rate banks charge one another for loans rose by the most since August over the weekend for the KSA; extending a trend that's slowing earnings and corporate borrowing for Saudi Arabia
• the rate for Saudi Arabia grew much faster than Gulf peers
• rates for KSA would only go down if there's a much larger cash injection; $5 billion won't cut it
• loans-to-deposit ratio among Saudi banks, a key measure of liquidity, rose to 91% in August, the worst since 2008

Both of those blog postings were posted just a few days ago, in October, 2016.

Flashback to May 22, 2016:

Saudi Arabia faces a vicious liquidity squeeze as capital continues to leak out the country, with a sharp contraction of the money supply and mounting stress in the banking system.

Three-month interbank offered rates in Riyadh have suddenly begun to spiral upwards, reaching the highest since the Lehman crisis in 2008.

Reports that the Saudi government is to pay contractors with tradable IOUs show how acute the situation is becoming. The debt-crippled bin Laden group is laying off 50,000 construction workers as austerity bites in earnest.

Today, Exxon Mobil CEO says the price of oil will remain in $50 - $60 range for years. Not good news for the Saudis.