Aramco’s first bond issuance broke record

Aramco's first bond issuance broke record
Aramco's first bond issuance broke record

The first issuance of Saudi Aramco's international bond offering inApril received orders reached up to $100bn, nearly 10 times the required, andso the first issue of the oil giant broke record.

This reflects the global confidence in the financial flows ofAramco and the Saudi economy and its institutions.

Saudi Aramco raised $12bn of 3 to 30-year maturities that attracteddemand exceeding $100bn, according to a document issued by one of the bank'slisted for arranging the IPO.

The Saudi oil giant sold $1bn of three-year bonds, offeringinvestors 55 basis points over US Treasuries.

It's note that bond pricing came in better than expected.

Aramco raised $2bn of five-year bonds at 75 basis points above thesame benchmark, $3bn of 10-year notes at 105 basis points, $3bn of 20-yearnotes at 140 basis points and $3bn of 30-year notes at 155 basis points.

The Reuters news agency said in a report, then, that the turnout,which exceeded the $100bn barrier of an estimated $10billion, is considered a "voteof confidence in the market, breaking a record barrier for the issuance of theoil giant Aramco".

Demand for Aramco's bonds is the largest for emerging markets, withAramco's bonds attracting demand from a wide range of investors, with thecompany's huge profits.

Saudi Aramco chief executive Amin Al-Nasser said at the time thatAramco would not issue more bonds this year after it sold its firstinternational bonds earlier in April for $12bn.

Al-Nasser said future Aramco debt issuance would depend on itsfunding requirements, but the company would continue to take a cautiousapproach to managing its budget.

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