https://arab.news/m749p
RIYADH: Saudi energy giant Aramco has completed a $3 billion international sukuk issuance, with demand exceeding expectations and reaching six times oversubscription, the company announced.
The issuance, consisting of two US dollar-denominated tranches, includes a $1.5 billion tranche maturing in 2029 with a 4.25 percent profit rate and another $1.5 billion tranche maturing in 2034 at a 4.75 percent profit rate, according to a press release.
Both tranches, priced on Sept. 25 at a negative new issue premium, are listed on the London Stock Exchange, reflecting Aramco’s strong credit strength.
The issuance is part of Aramco’s efforts to diversify funding, expand its investor base, and re-establish its sukuk yield curve. It follows the company’s return to global debt markets in July, its first since 2021.
Ziad T. Al-Murshed, Aramco executive vice president and chief financial officer, said: “Building on the strong investor reception from our July 2024 bond issuance, this sukuk offering represented an opportunity to engage with a broader investor base.”
He added: “The impressive demand, as demonstrated by the oversubscribed sukuk order book, reflects Aramco’s unique credit proposition, underpinned by its competitive advantage and a proven track record of financial resilience through cycles.”
In July, Aramco raised $6 billion from a three-tranche sukuk as part of its Global Medium Term Note Program. The latest issuance continues the company’s strategy to strengthen its presence in international financial markets.
The state-owned firm’s integrated expansion strategy is driving the Kingdom’s Vision 2030 economic diversification plan while addressing sustainability concerns, experts told Arab News earlier this year.
At the center of Saudi Arabia’s energy transformation, the energy giant is focused on creating new market opportunities and increasing integration across multiple sectors.
Economists told Arab News that Aramco is not only focused on boosting Saudi Arabia’s economic performance but is also driving technological innovation to meet ambitious environmental targets.
The company’s strategic roadmap includes expanding into new markets, particularly in Asia and North America, while using its venture capital arm to foster disruptive technologies.
Aramco CEO Amin Nasser said earlier that the company is “looking at the current market status which, even though challenging, presents an excellent opportunity for growth.” This forward-thinking approach supports the company's strategic vision to solidify its position as a leader in the global energy landscape.