State-owned Saudi Basic Industries Corporation (Sabic) has delayed plans to issue a bond because of turmoil in the global financial markets stemming from concerns on European sovereign debt and fears about the region’s banks, and political tensions on the Korean peninsula.

Sabic completed a roadshow of international investors on 25 May and was expected to raise a bond issue of over $500m. Initial price guidance was expected to be in the region of 150 to 200 basis points above the five year mid-swap rate.

Bankers close to the deal, however, say the issue is now on hold. “The Sabic deal has been postponed given the market volatility at the moment. They are not in any hurry to borrow and although feedback from the roadshow was good, they do not want to overpay,” says one source close to the deal.

Sabic had appointed the UK’s HSBC, Royal Bank of Scotland (RBS) and the US’ JP Morgan to lead the issue.

Another planned bond issue is also now on hold because of the market conditions. BBK, formerly Bank of Bahrain and Kuwait, had held meetings with investors around the same time as Sabic, but has decided not to go ahead with a deal to sell debt to global investors.