By Amna Mariyam and Yousef Saba
The world’s largest oil company, Saudi Aramco, has launched a $4bn four-tranche bond, drawing robust demand from investors for its first foray into global debt markets this year. The state-owned oil behemoth issued $500m, $1.5bn, $1.25bn and $750m in bonds with maturities of three, five, 10 and 30 years, respectively, the fixed-income news service IFR said on Monday.
Order books for the offering exceeded $21bn, showing strong investor appetite, enabling Aramco to tighten the spread on the three-year bonds to 60 basis points (bps) over US treasuries from an initial guidance of 100 bps, IFR said. The five-year tranche was priced at 80 bps over treasuries, narrowing from an indicative spread of 115 bps.
The 10-year and 30-year bonds were finalised at 95 bps and 130 bps, respectively, compared with initial pricing of about 125 bps and 165 bps over US treasuries, IFR said. Aramco last tapped debt markets in September, raising $3bn with a sale of sukuk, or Islamic bonds, after a bond sale in May for $5bn.
It had stayed away from the debt markets for three years until it returned to raise $6bn in July 2024. Long a cash cow for the Saudi government, Aramco said last August it was cutting costs company-wide and looking to divest assets as crude prices fell and its debt rose. Aramco’s total dividends for 2025 are expected to be about $85.4bn, a drop of about 30% from 2024, as payouts linked to free cash flow dwindled.
The government owns nearly 81.5% of Aramco directly while the sovereign wealth fund PIF controls another 16%.
Reuters had reported on Aramco’s cost-cutting and divestment measures ahead of its CFO’s confirmation on an earnings call, including a planned sale of gas plants. Aramco has also raised funds via other avenues.
Last year, it signed an $11bn lease and leaseback agreement involving its Jafurah gas processing facilities with a consortium led by Global Infrastructure Partners (GIP), part of BlackRock. In 2024, the Saudi government raised $12.35bn by floating a stake of 0.64% in Aramco.
Citi, Goldman Sachs, HSBC, JPMorgan and Morgan Stanley were active bookrunners, while Abu Dhabi Commercial Bank, Bank of China, BofA Securities, BSF Capital, Emirates NBD Capital, First Abu Dhabi Bank, Mizuho, MUFG, Natixis, Riyad Capital, SMBC and Standard Chartered were passive bookrunners for the debt sale.
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