Saudi Arabia is considering upsizing its highly anticipated international bond issuance to $17.5bn. Demand reportedly reached as much as $67bn.

The pricing has tightened slightly and is now thought to be approximately 140 basis points (bps) over treasuries for the five-year tranche, 170 bps for the 10-year tranche and 215 bps for the thirty-year tranche, according to news agencies Bloomberg and Reuters.

This is roughly 50 bps above Qatari bonds issued earlier this year.

The debt sale is expected to be finalised on 19 October. It will be the largest emerging market debt issuance ever, surpassing Argentina’s $16.5bn issuance earlier in 2016.

Earlier reports indicated that Saudi Arabia would issue $10bn to 15bn of bonds, priced at 160, 185 and 235 bps over Treasuries for the respective tranches.

The US’ Fitch Ratings assigned the bonds a provisional rating of AA-(EXP).

The kingdom has hired the US’ Citigroup and JPMorgan Chase, and the UK’s HSBC Holdings as global coordinators, and has added seven other managers from Japan and China to Germany and France, according to the news reports.

Saudi Arabia is expected to run a 13 per cent of GDP fiscal deficit in 2016, and 9.5 per cent in 2017, according to IMF figures. So far, Saudi Arabia has financed its deficit by drawing down on foreign reserves by more than $170bn over the past two years, and issuing billion of riyals of domestic debt.

Gross government debt will rise from 5 per cent of GDP in 2015 to 19.9 per cent in 2017, the IMF predicts. US-based Standard & Poor’s expects the kingdom to borrow as much as $180bn by 2019.

Bond investors were presented with Saudi Arabia’s ambitious Vision 2030 and five-year National Transformation Programme, which aim to diversify the economy away from oil, reduce the fiscal deficit and attract private sector investment.

However, spending cuts have already dampened non-oil growth to 0.3 per cent this year, with a recovery to 2.6 per cent expected in 2017.

Saudi Arabia’s breakeven oil price remains at $79.7 a barrel this year, according to the IMF.