Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Interest Rates

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 

Saudi Aramco gets $8 billion with jumbo five-part bond deal

11/17/2020 | 02:13pm EST
FILE PHOTO: A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq

DUBAI (Reuters) - Saudi Aramco was set to raise $8 billion (£6 billion) from a five-part bond deal on Tuesday as the world's largest oil producer seeks cash after low oil prices dented its finances.

It received $48.1 billion in orders for the debt sale, less than half what it drew for its debut bond sale last year, when it raised $12 billion, a document issued by one of the banks leading the deal showed.

The move is part of an onslaught on international debt markets by Gulf issuers seeking to plug finances hit by the pandemic and weak oil prices, which has pushed regional issuance past last year's record to surpass $100 billion.

Aramco, which reported a 44.6% slump in third-quarter profit, needs the money to pay dividends of $37.5 billion for the second half of 2020 and fund its $69.1 billion purchase of 70% of Saudi Basic Industries (SABIC).

It also raised a loan of $10 billion this year, to be paid in instalments until 2028, to back that acquisition.

Aramco sold $500 million in three-year bonds at 110 basis points over U.S. Treasuries (UST), $1 billion in five-year bonds at 125 bps over UST, $2 billion in 10-year notes at 145 bps over UST, $2.25 billion in 30-year bonds at 3.3% and $2.25 billion in a 50-year tranche at 3.55%, the document showed.

"I think the shorter-end is offering a bit more value than the longer-dated bonds to where the existing bonds are trading," said Max Wolman, senior portfolio manager at Aberdeen Asset Management.

Aramco tightened the spreads on the tranches with maturities of three, five and 10 years by 30 bps from where it began marketing them earlier on Tuesday. The spreads on the 30- and 50-year tranches were tightened by around 40 bps.

Last year, Aramco priced its debut bonds inside the Saudi government's debt curve, but this bond sale was wider.

The 50-year tranche is the longest-dated international debt issued by Saudi Arabia. In April, it issued a 40-year bond tranche - at the time the longest-dated dollar issuance by a Gulf borrower, only to be overtaken by a 50-year tranche by Abu Dhabi in August.

Citi, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, NCB Capital were hired as active book runners.

Other banks involved in the deal include BNP Paribas, BOC International, BofA Securities, Credit Agricole, First Abu Dhabi Bank, Mizuho, MUFG, SMBC Nikko and Societe Generale.

(Reporting by Yousef Saba; Editing by Tom Hogue and Dan Grebler)

By Yousef Saba


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
BNP PARIBAS 0.09% 44.43 Real-time Quote.3.05%
BOC INTERNATIONAL (CHINA) CO., LTD. -0.27% 25.65 End-of-day quote.-7.33%
CRÉDIT AGRICOLE SA -0.34% 10.16 Real-time Quote.-1.11%
FIRST ABU DHABI BANK P.J.S.C. 0.53% 15.06 End-of-day quote.16.74%
HSBC HOLDINGS PLC 2.22% 417 Delayed Quote.7.69%
MITSUBISHI UFJ FINANCIAL GROUP, INC. -0.99% 489.7 End-of-day quote.7.37%
MIZUHO FINANCIAL GROUP, INC. -1.50% 1411 End-of-day quote.7.92%
SAUDI ARABIAN OIL COMPANY -0.29% 34.8 End-of-day quote.-0.57%
SAUDI BASIC INDUSTRIES CORPORATION 0.19% 103.8 End-of-day quote.2.37%
SOCIÉTÉ GÉNÉRALE -0.74% 16.948 Real-time Quote.0.36%
SUMITOMO MITSUI FINANCIAL GROUP, INC. -1.71% 3383 End-of-day quote.6.12%
THE NATIONAL COMMERCIAL BANK 0.22% 45.35 End-of-day quote.4.61%
Latest news "Interest Rates"
04:57aIndonesia central bank keeps rates unchanged, vows more support
RE
01/20'No evidence of decline' in COVID-19 rates in England's third lockdown
RE
01/20Ecuador bonds extend losses after presidential hopeful arauz says would scrap imf program, prioritize social spending
RE
01/20Ecuador bonds fall after presidential hopeful Arauz says would scrap IMF program
RE
01/20Arauz says he would continue to make bond payments, but that social needs take priority over debt payments
RE
01/20U.s. 20-year bond yields slip after auction of $24 bln to trade at 1.646%
RE
01/20COVID : Uk's johnson says it looks as though infection rates might be peaking or flattening but they are not flattening very fast
RE
01/20No discussion at BoE about cutting rates below zero - Bailey
RE
01/20Bank of Canada says medium term outlook brighter, holds rates steady
RE
01/20ANALYSIS : Rising U.S. bond market inflation gauge masks extent of pandemic shock
RE
Latest news "Interest Rates"