Bloomberg/Simon Dawson

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Saudi Aramco raises $12 billion in debut international bonds sell

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The bond sale raises money to finance Saudi Arabia’s economic agenda after an initial public offering of Aramco was postponed last year until at least 2021.

Thursday 11, April 2019

(Bloomberg) --Saudi Arabia took its first major step onto the global financial stage, issuing $12 billion of bonds for its state-run oil company in one of the most oversubscribed debt offerings in history.

The demand for Saudi Aramco’s debut offering was so robust it allowed the energy giant to borrow at a lower yield than its sovereign parent.

Additionally, the state-owned oil giant’s bond issue, split into maturities ranging from three to 30 years, is seen as a gauge of potential investor interest in Aramco’s eventual initial public offering (IPO).

The success of the deal has also been seen as essential for some of the world’s biggest banks, who took Aramco and Saudi government officials on a worldwide roadshow last week pitching the bonds from Boston to Singapore. Jamie Dimon, the Chief Executive Officer of JPMorgan Chase touted the deal at a lunch in New York.

JPMorgan and Morgan Stanley managed the bond sale along with Citigroup, Goldman Sachs Group, HSBC Holdings and NCB Capital.

During its worldwide roadshows, investors were showed financial data and operational secrets of the Kingdom’s most important asset, information that had been held closely since the company’s nationalisation in the late 1970s.

The disclosures gave investors plenty of reasons to jump on the deal. With $111 billion of profit in 2018, Aramco ranks as the most profitable company in the world. Moody’s Investors Service likened it to a AAA rated corporation, with low debt relative to its cash flow and access to one of the world’s largest hydrocarbon reserves.

TAGS : Aramco IPO, Debut international bond, SABIC, JPMorgan Chase, Citigroup, Goldman Sachs Group, HSBC Holdings, NCB Capital, Jamie Dimon

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