Saudi Aramco Seeks at Least $3 Billion From Bond Sale - Bloomberg
Aramco is looking to raise a minimum $3 billion from its first bond sale in three years, people familiar with the plan said, adding to Saudi Arabia’s debt spree this year.
The world’s biggest oil exporter is offering debt with 10-, 30- and 40-year maturities, according to a person with knowledge of the matter. Meetings with fixed income investors are expected to start Tuesday, the person said, with funds likely to be used to refinance existing borrowings and contribute to its investment program.
The Saudi government and its various units have been borrowing vast amounts this year, topping China as the biggest issuer of international debt among emerging markets. Aramco, whose massive dividend payout is a significant contributor to Crown Prince Mohammed Bin Salman’s economic diversification plan, is expanding natural gas production at home, spending billions to maintain oil output and pursuing acquisitions overseas.
The final size of the borrowing could be larger depending on investor demand. A spokesperson for Aramco declined to comment.
Chief Financial Officer Ziad Al-Murshed said in February that the firm could look to sell long-dated debt this year as financial markets improve and the company looks to leverage its massive balance sheet. The plan to issue long-maturity bonds shows Aramco is confident it can remain relevant well past the middle of the century even as the energy transition raises questions over future oil demand.
Aramco has hired banks including Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase & Co., Morgan Stanley and SNB Capital to manage the bond sale, it said in a statement Tuesday.
The bond issue comes weeks after Saudi Arabia offloaded an $11.2 billion stake in Aramco. The government, which needs the funds to help cover an expected fiscal shortfall, has accounted for more than half of the $33 billion of debt sold by Saudi entities this year.
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