On Thursday, Saudi Aramco declared that a $3 billion international sukuk offering was completed. According to the oil company, the offering had a six-fold oversubscription, indicating high investor demand.
The issuance is divided into two tranches denominated in U.S. dollars: $1.5 billion that matures in 2029 and has an annual profit rate of 4.25 percent, and another $1.5 billion that matures in 2034 and has an annual profit rate of 4.75 percent.
On September 25, 2024, Aramco priced its issuance of Islamic bonds, or sukuk, and the securities were listed on the London Stock Exchange. Aramco’s good credit profile was also reflected in the negative fresh issue premium it paid for both tranches.
The sukuk offering, which was a component of SA Global Sukuk Limited’s Trust Certificate Issuance Program, ended on October 2. The minimum subscription was $200,000, and depending on the market, multiples of $1,000 were incorporated above that sum.
The successful issue of sukuk builds on Aramco’s attempts to re-establish its sukuk yield curve, increase liquidity, and diversify and widen its investor base.
“This sukuk offering represented an opportunity to engage with a broader investor base, building on the strong investor reception from our July 2024 bond issuance,” said Ziad T. Al-Murshed, CFO and executive vice president at Aramco.
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