Saudi Aramco wants to raise $3 billion from the new bond issue

Saudi Aramco, the world’s biggest oil company, is looking to raise up to $3 billion in U.S. dollar-denominated Islamic bonds, Reuters said on Tuesday, citing sources with direct knowledge of the plans.

Aramco, which is also the world’s largest crude oil exporter, plans to issue Islamic bonds, so-called sukuk, in two tranches – five-year notes and ten-year notes. The Saudi oil giant aims to raise up to $3 billion from the bond sale, according to the sources.

Today, Aramco announced in a regulatory filing to the Saudi stock exchange, Tadawul, its intention to offer international trust certificates (sukuk) in US dollars.

“The issue amount is subject to market conditions,” Aramco said in the filing.

The start date of the offer is Tuesday, September 24, with a scheduled end date of October 2, 2024.

The price, yield and maturity of the Islamic bonds will be determined by market conditions, Aramco said.

The Saudi oil giant issued a $6 billion bond in July — its first foray into the bond market since 2021.

Before 2024, the first time the world’s largest oil company tapped into bond markets was in 2021, when Aramco raised $6 billion through its first US dollar-denominated Islamic bond, orders for which exceeded $60 billion dollars.

Orders for the $6 billion bond in July topped $31 billion.

Aramco is a major source of revenue for the Saudi government, which has large-scale plans to diversify the Saudi economy. The Saudi government owns 81.5% directly in Aramco, and another 16% is held by the kingdom’s sovereign wealth fund – the Public Investment Fund.

Aramco’s July bond came weeks after Saudi Arabia raised $11.2 billion in a share sale of Aramco shares.

Saudi Aramco made its debut on the Saudi Stock Exchange in December 2019 and raised about $30 billion in a stock listing that became the world’s largest ever.

Since the IPO, Saudi rulers, including Crown Prince Mohammed bin Salman, have repeatedly said there will be more Aramco shale sales in the future.

By Charles Kennedy for Oilprice.com

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