Saudi Aramco Issues US Dollar-Denominated Bonds Under Global Medium Term Note Program
In a bold move, energy giant Saudi Aramco has launched its US dollar-denominated international bonds as part of its Global Medium Term Note Program.
Return to the Debt Market
After a three-year hiatus, Aramco is making its comeback to the debt market with this offering. The last time the company tapped into global debt markets was in 2021, where it raised $6 billion from a three-tranche sukuk. In February, plans were already in motion for another bond issuance this year.
Global Interest in Debt Markets
Gulf companies and governments have been keen on leveraging the debt markets this year due to declining global interest rates. In January, the Kingdom issued $12 billion in dollar-denominated bonds, aligning with this trend.
Issuance Details
Aramco’s US dollar-denominated bonds are direct, general, unconditional, and unsecured obligations of the company. They are targeted at institutional investors, specifically qualified investors in jurisdictions where the offering complies with local regulations. The issuance is managed by Citi, Goldman Sachs International, and HSBC, with other notable joint bookrunners involved.
Future Plans
Looking ahead, Aramco has disclosed potential redemption options for the bonds and hinted at issuing longer-term bonds up to 50 years in 2024 as market conditions improve. The company remains focused on its long-term goals and strategic plans.
Record Pace of Borrowing
Saudi Arabia has emerged as a leading issuer of international bonds among emerging markets, surpassing China in bond sales. This accelerated pace of borrowing is in support of the nation’s Vision 2030 plan, aiming to diversify the economy away from oil dependence and establish the country as a global business hub by the end of the decade.