Aramco is reportedly thinking of raising financial resources with long-term bonds
Saudi state oil giant Aramco may issue a new bond this year to optimize its capital structure, according to its chief financial officer Ziad Al-Murshed.
Saudi Aramco's bond issue features longer terms, up to 50 years, the executive said at the Saudi Capital Markets Forum in Riyadh, as reported by Reuters.
The last time the world's largest oil company turned to bond markets was in 2021, when Aramco raised $6 billion through its first dollar-denominated Islamic bond, the so-called sukuk, whose orders exceeded 60 billion dollars.
The Sukuk is a very particular type of security: given that Islamic law prohibits the payment of interest, the sukuk is not, in itself, a debt security, but a security for participation in an asset that generates profits. Therefore with the sukuk the interests are represented by shares of the underlying profit.
As for the alleged issuance of new shares, it is not up to Aramco to decide “the sale of existing government shares,” Al-Murshed said, adding that he did not wish to comment further.
Last month it emerged that Saudi Arabia was working with advisers to revive a new sale of shares in Aramco, the world's largest oil company in terms of both market capitalization and oil production.
Currently, the Kingdom of Saudi Arabia owns just over 98% of Aramco after selling 1.7% in the initial public offering (IPO) in December 2019. Of the 98% held by the Kingdom, the Saudi government owns 90 % of Aramco, while the sovereign wealth fund owns the remaining 8%.
The Saudis are looking to sell Aramco shares on the domestic market and aim to raise at least $10 billion from the follow-up offering, anonymous sources familiar with the plans told Bloomberg in late January.
Saudi Aramco made its debut on the Saudi stock exchange in December 2019 and raised about $30 billion in the stock listing that became the largest in history.
After the IPO, Saudi rulers, including Crown Prince Mohammed bin Salman, have stated on several occasions that there will be more Aramco shale sales on the Tadawul in the future.
Thanks to our Telegram channel you can stay updated on the publication of new Economic Scenarios articles.
The article Aramco is thinking of raising financial resources with long-term bonds comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/aramco-starebbe-pensando-di-raccogliere-risorse-finanziarie-con-obbligazioni-a-lungo-termine/ on Mon, 19 Feb 2024 14:20:43 +0000.