Saudi Arabia’s energy giant Aramco made its return to the debt markets after a three-year hiatus, joining top companies and governments in the Gulf that have tapped markets this year to fund investments.
This issuance includes three tranches of USD-denominated senior unsecured notes under Aramco’s Global Medium Term Note Program (GMTN). The tranches are as follows:
- $2 billion senior notes maturing in 2034 with a 5.250% coupon rate.
- $2 billion senior notes maturing in 2054 with a 5.750% coupon rate.
- $2 billion senior notes maturing in 2064 with a 5.875% coupon rate.
The company has confirmed it raised $6 billion from its bond issuance. The notes were priced on July 10, 2024, and are currently listed on the London Stock Exchange.
The offering was highly successful, being more than six times oversubscribed compared to the initial targeted size of $5 billion, demonstrating strong investor interest. The offering’s order book exceeded $33 billion at its peak.
“We are pleased with the strong interest and level of engagement from investors globally, both existing and new.,” said Ziad T. Al-Murshed, Aramco Executive Vice President of Finance and CFO of Aramco. “We have consistently demonstrated our financial discipline, while delivering on shareholder value and business growth, and we aim to maintain a strong investment-grade credit rating across business cycles.”
The past year has witnessed GCC companies’s increased interest in tapping debt markets, amidst declining global interest rates. In January, the Kingdom issued $12 billion in dollar-denominated bonds as part of this trend. Aramco last tapped the global debt markets in 2021, when it raised $6 billion from a three-tranche sukuk. Last February, the company indicated plans to issue another bond this year.
In May, Aramco completed the sale of approximately $12 billion worth of shares in its national oil company. Earlier that year, the oil giant reported a net income of $121.3 billion for 2023, the second-highest in the company’s history.
