Aramco’s bond debut attracts $30bn bids

Published
0
People familiar with the matter told Reuters that Aramco’s vast profits – nearly three times those of Apple last year - meant investors were willing to buy the bonds even if they end up getting a lower return than on Saudi sovereign debt. ─ Reuters/File
People familiar with the matter told Reuters that Aramco’s vast profits – nearly three times those of Apple last year - meant investors were willing to buy the bonds even if they end up getting a lower return than on Saudi sovereign debt. ─ Reuters/File

RIYADH: Saudi Aramco has received bids for more than three times the $10 billion it was expected to raise in a debut international bond issue, which is being watched as a gauge of potential investor interest in the oil company’s eventual initial public offering.

The demand prompted the world’s largest oil firm to market the six-part deal – which will price on Tuesday and could see Aramco raise more than $10bn – with a smaller than expected premium to the Saudi government that owns it.

Read more: Ghawar oilfield: Aramco’s ace of spades

People familiar with the matter told Reuters that Aramco’s vast profits – nearly three times those of Apple last year - meant investors were willing to buy the bonds even if they end up getting a lower return than on Saudi sovereign debt.

Aramco last year postponed until 2021 an initial public offering (IPO) aimed at raising money for a government looking to cut its budget deficit and diversify its economy beyond oil.

“The success of this bond issue will be the litmus test and a crucial precursor for the anticipated Aramco IPO within the next two years,” said Salah Shamma, head of investment, MENA equities, at Franklin Templeton.

Speaking at an event in Riyadh, Saudi Energy Minister Khalid al-Falih said he believed demand for the issue was “north of” $30bn.

Aramco met investors last week in a global roadshow ahead of the issue. The bonds, which range in maturity from three to 30 years, are expected to attract demand from both emerging markets and investment-grade buyers.

Published in Dawn, April 9th, 2019

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Fixing bond markets
Updated 01 Oct, 2026

Fixing bond markets

Pension funds, insurance companies, mutual funds, retail investors, and eventually, foreign investors must become bigger participants in the market.
Call centre rackets
01 Oct, 2026

Call centre rackets

A NUMBER of recent raids conducted by the authorities in different cities point to the growing threat fraudulent ...
Homeward bound
01 Oct, 2026

Homeward bound

FIVE months after Somali pirates captured an oil tanker carrying a 19-member multinational crew, Somali maritime...
Kashmir unresolved
Updated 30 Sep, 2026

Kashmir unresolved

The just solution lies in India addressing the issue through a trilateral dialogue involving the legitimate representatives of the Kashmiri people and Pakistan.
Water shortage
30 Sep, 2026

Water shortage

THAT the country is entering the Rabi season with an anticipated water shortage of nearly 25pc, the lowest carryover...
Young hearts
30 Sep, 2026

Young hearts

THE observance may have passed, but the message of World Heart Day should not fade with it. The occasion is a useful...