Energy and chemicals company Saudi Aramco announced that it has completed a bond issuance of $6 billion. The issuance is comprised of three tranches of dollar-denominated senior unsecured notes under Aramco’s Global Medium Term Note Program (“GMTN”).
Bond issuance details
The tranches include $2 billion senior notes maturing in 2034 with a coupon rate of 5.250 percent, $2 billion senior notes maturing in 2054 with a coupon rate of 5.750 percent, and $2 billion senior notes maturing in 2064 with a coupon rate of 5.875 percent. The transaction was priced on July 10, 2024, and the notes are listed on the London Stock Exchange.
Overwhelming investor demand
The offering was more than six times oversubscribed, based on the initial targeted size of $5 billion, and the transaction received strong demand from a diverse base of investment-grade focused institutional investors. Additionally, all three tranches were favorably priced with a negative new issue premium, reflecting Aramco’s strong credit profile.
Read more: Saudi Aramco emerges as world’s largest oil company with 259 billion barrels of reserves
Exceptional financial resilience
Ziad T. Al-Murshed, Aramco executive vice president of Finance & CFO, said: “We are pleased with the strong interest and level of engagement from investors globally, both existing and new. Our order book exceeded $33 billion at its peak, reflecting Aramco’s exceptional financial resilience and fortress balance sheet. Achieving a negative issue premium across all tranches is a testament to our unique credit proposition.”
Al-Murshed added, “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.”
Maintained dividends
Moreover, in May 2024, Saudi Aramco announced that it expects to pay $31 billion in dividends to the Saudi government and its other shareholders. This came despite the company reporting lower profits in the first quarter of 2024, which was attributed to a decline in global oil prices during that period.
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