Sale of Aramco bonds to pay off shareholder debt. Aramco plans to issue about $ 5 billion in bonds to pay cash dividends to its shareholders.
Saudi oil company Aramco has hired banks to help it get new loans by selling dollar bonds.
Three sources said Aramco was seeking to raise funds by selling dollar-denominated bonds before making major commitments to its main shareholder, the Saudi government.
Aramco is expected to become a permanent issuer of bonds after the release of $ 12 billion in 2019, as were the $ 8 billion five-tranche exports last November.
A source said Aramco had hired a large group of banks, including First Abu Dhabi, HSBC, Al-Ahly Capital, and Standard Charter, to plan and sell Aramco bonds.
Aramco Oil Company is expected to raise up to $ 5 billion, and the deal will be done through the issuance of Sukuk in the next few weeks.
Abu Dhabi First Bank and HSBC, as well as Standard Charter, have not yet responded to Aramco’s request.
Despite falling oil prices last year, the oil company did not deviate from its $ 75 billion dividend commitment and is expected to make large domestic investments that are part of Saudi Arabia’s economic development plans.
“Aramco company needs cash to pay its dividends,” said a debt specialist who did not want to be named.
The deal could take place in the coming weeks, with Qatar Petroleum expected to issue bonds by the end of June, which sources say could reach $ 10 billion, a source said.
Saudi Aramco’s debt has more than quadrupled in the past two years as the oil giant financed the Sabik purchase deal, after which falling oil prices hurt its profits.
Aramco may not be the only energy company to hit the bond market this month. Gulf oil companies are seeking to provide liquidity after the 2020 crisis.
The news of Aramco bond planning and sale deal was first published by Bloomberg.
