Saudi Aramco plans to issue USD-denominated bonds

Logo of Saudi Aramco

Saudi Arabian Oil Co. (Saudi Aramco) announced plans to issue international bonds under its US-denominated Global Medium Term Note Programme.

The bonds will be senior unsecured notes, the company said in a statement to Tadawul.

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The bonds will constitute USD-denominated, direct, general, unconditional and unsecured obligations of Saudi Aramco. The offer value is subject to market conditions.

The net proceeds from each bond issuance will be used by Saudi Aramco for general corporate purposes or any other purpose specified in the final terms for a series of bonds.

The oil major mandated Citi, Goldman Sachs International, HSBC and J.P. Morgan as active joint bookrunners.

Abu Dhabi Commercial Bank, Bank of China, BofA Securities, Emirates NBD Capital, First Abu Dhabi Bank, Mizuho, MUFG, NATIXIS, Riyad Capital, SMBC, SNB Capital and Standard Chartered Bank have been mandated as passive joint bookrunners. The bond issuance will be subject to the approval of the relevant regulatory authorities. In addition, the bonds will be issued in accordance with the Rule 144A/Reg S offering requirements under the US Securities Act of 1933, as amended.

The stabilization rules of the Financial Conduct Authority (FCA) and the International Capital Market Association (ICMA) will also apply to the issuance.

Application will be made for the bonds to be admitted to the official list of the FCA and the London Stock Exchange and for such bonds to be admitted to trading on the London Stock Exchange’s main market.

The offering of the bonds will be limited to qualified investors in the jurisdictions in which the offering will be made in line with the rules and regulations of such jurisdictions.

According to Argaam’s data, Reuters reported today that Aramco was seeking to raise funds through a USD-denominated three-part bond sale.

Aramco set the indicative price for the five-year bonds at 115 basis points (bps) over US Treasuries. Meanwhile, the 10-year and 30-year portions carry initial price guidance of 130 and 185 bps, respectively, over the same benchmark.