DUBAI: After raising $5 billion from a three-part bond sale this week, Saudi Aramco has released a new prospectus for its issuance program of Islamic bonds, or sukuk, suggesting the state oil company may soon access the debt markets once again. On May 30, the prospectus was sent to the London Stock Exchange, which would list the sukuk. Under its provisions, Aramco has a year to issue sukuk.
Earlier previous week, Aramco sold conventional notes to raise $5 billion. The borrowing follows the impact of increased production and economic uncertainties on petroleum markets, which hurt the earnings of the leading oil exporter. According to Zeina Rizk, co-head of fixed income at Amwal Capital Partners, “Aramco is probably looking to take advantage of a window of relative market calm to issue debt again.”
In March, Aramco stated that it anticipated cutting its dividend by about a third this year due to a drop in profitability and free cash flow. Aramco is looking at possible asset sales to raise money as it looks to expand internationally and weathers down oil prices, according to a Reuters story last week. The sukuk program is arranged by Citi, HSBC, and JPMorgan, with First Abu Dhabi Bank, Goldman Sachs, Morgan Stanley, SNB Capital, and Standard Chartered joining as dealers.
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