For bankers and financial analysts, the recent bond issue of $17.5 billion by Saudi Arabia might as well be the landmark trade of the year.  Its huge value has hit the international markets like the big bang, encompassing diverse issues in the financial, political and economic arena.

Actually, the size of the instrument, while inevitably large, is not the main issue. What is alluring is the yield expected from the issuance.

For example, the 30-year $6.5 billion portion of the bond is expected to give back 2.1 percentage points more than the regular U.S. Treasury bond, a whopping return of 4.6%. This is generous yield when compared to bonds issued in develop where returns are almost nil or even in the negative levels.

Factors leading to the bond offer remain unclear although the leading cause may be the one and years of dwindling oil prices that brought down Saudi Arabia's economy to a deficit of 15.9% of gross domestic product by the end of 2015.  The deficit is forecasted by the International Monetary Fund (IMF) at 16% in 2016 and 22.9% by the end of 2017.

Given the effect of oil prices in Saudi Arabia's economy, bond buyers are keeping watch on the credit situation of the country. The rising price in oil prices, though sluggish, is nearing its highest levels in the current year.

The five and ten year offers, which are part of the 30-year bonds, are easier to decipher since their calculated yields are mainly based on the price of oil in the near future. The value of the longer term bonds depend much on the capability of Saudi Arabia to maintain social and political ability within its realm and to add new industries besides oil into their economy.  

Because of many changes in the Middle East environment, bankers agree that only time will determine whether this Saudi Arabia bond offering will truly be the landmark deal in 2016.