Written by 16:41 News, Saudi Arabia

Saudi Aramco Starts to Issue Bonds Denominated in US Dollars

Saudi Aramco Starts to Issue Bonds Denominated in US Dollars

Under its Global Medium Term Note Program, the energy behemoth Saudi Aramco has begun issuing international bonds denominated in US dollars.

Aramco revealed in a Tadawul statement that the bonds have a $200,000 minimum subscription and that the value and offering price are subject to change based on the status of the market. The offering is scheduled to end on July 17 and started on July 9.

After a three-year break, the state oil company is back in the debt market with this deal. It last used the international debt markets to raise $6 billion through a three-tranche Islamic bond, or sukuk, in 2021. It announced plans to issue another bond this year in February.

In light of the falling global interest rates this year, Gulf governments and corporations have been keen to take advantage of the debt markets. As part of this trend, the Kingdom issued bonds worth $12 billion in dollars in January.

In its Tadawul announcement, Aramco said that the bonds denominated in US dollars represent the company’s direct, general, unconditional, and unsecured obligations.

Institutional investors—more precisely, qualified investors in jurisdictions where the offering complies with local regulations—are the target market for these bonds. HSBC, Citi, and Goldman Sachs International are in charge of managing the issue. As active joint bookrunners, JP Morgan, Morgan Stanley, and SNB Capital are also involved.

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