SAUDI Basic Industries Corp (Sabic) has launched a $1 billion five-year bond, with pricing tighter than guidance released at the beginning.

Sabic Capital, a unit of the largest listed company in the Gulf, had planned to issue a bond earlier in the year but held off due to unfavourable market conditions at the time.

One market source says: “It’s a company that the markets like, the problem is that markets regard the last few deals as having priced too tight, which is clearly what the issuers want. It will be interesting to see how the deal performs in secondary (trading).”

Another market source says: “We should see some selling coming on first up before buying comes in.”

The petrochemicals giant mandated HSBC, JPMorgan and Royal Bank of Scotland as bookrunners for the bond issue.

Sabic chief executive Mohamed Al Mady confirms the amount and the pricing of the bond, and says its proceeds would go towards refinancing existing debt. He says: “We consider it (the pricing) good.”

Asked if more issues were in the pipeline, Mady says: “Definitely, in the future, there will be new issues and borrowing both inside and outside the kingdom.” He did not give details.