Saudi Aramco saw $ 3bn to $ 4bn raised with one dollar sukuk – sources
By Scott Murdoch and Yousef Saba
DUBAI, June 9 (Reuters) – Saudi oil giant Aramco 2222.SE is likely to raise between $ 3 billion and $ 4 billion on Wednesday, two sources said, as it returns to international debt markets with its first sale of US dollar-denominated sukuk.
The debt issuance, which will at least partially fund a large dividend that will mostly go to the government, will include three, five and 10 year tranches, the sukuk term sheet seen by Reuters showed.
Initial price forecast was around 105 basis points (bps) against US Treasuries (UST) for the three-year part, around 125 bps against UST for the five-year paper and around 160bp versus UST for 10-year bonds.
Last year, Aramco maintained a promised dividend of $ 75 billion to shareholders – primarily the government – despite falling oil prices, and is expected to shoulder large domestic investments in Saudi Arabia’s plans to transform the ‘economy.
The company chose to issue Islamic bonds rather than conventional bonds due to strong demand for the instrument due to the low number of dollar-dollar sukuk sales in the Gulf this year, a source told Reuters on Monday.
Aramco is widely expected to become a regular bond issuer after its first $ 12 billion issue in 2019 followed by an $ 8 billion five-part deal in November last year, also. used to finance its dividend.
A source told Reuters that Aramco is expected to raise up to $ 5 billion through the deal, which is expected to be finalized later Wednesday and on which 29 active and passive bookkeepers are working.
Bookkeepers active on the transaction include HSBC HSBA.L, JP Morgan JPM.N, BCN Capital 1180.SE and Standard Chartered Bank STAN.L. Passive bookkeepers include BOC International 601696.SS and the Islamic Bank of Dubai DISB.DU.
(Reporting by Scott Murdoch in Hong Kong and Yousef Saba; editing by Edwina Gibbs and Jan Harvey)
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