Saudi Aramco increased its debut bond sale from $10bn to $12bn this week amid huge demand that saw total orders exceed $100bn. Demand for Aramco debt was always going to be strong given the firm’s status as the world’s largest oil producer and ongoing strategy to boost integration (MEES, 5 April). Perhaps the most notable element is that while the bond was initially priced in line with Saudi government debt, it eventually closed at a lower rate. This unusual development is indicative that the kingdom’s creditworthiness is underpinned by Aramco, rather than the other way around.
The issuance comprises of five tranches; $1bn at 2.75% to 2022, $2bn at 2.875% to 2024, $3bn at 3.5% to 2029, $3bn at 4.25% to 2039 and $3bn at 4.375% to 2049. Aramco expects the offering to close on 16 April. (CONTINUED - 128 WORDS)