Aramco Exceptional Bond Sale Adds Record Gulf Debt Issue

LONDON: Saudi Aramco has started marketing a sale of dollar-denominated bonds as the world’s largest oil company joins a series of new debt sales across the Gulf.

Low oil prices are encouraging companies across the region to tap into debt markets, which has already boosted bond issuance beyond last year’s record and through the $ 100 billion barrier. dollars.

The trend is expected to continue next year with debt issuances expected to reach $ 140 billion, according to Goldman Sachs. Most will come from the Gulf States and Latin America.

“Current market conditions are favorable for Aramco to go into debt and demand is expected to be strong,” Monica Malik, ADCB chief economist, told Arab News. “The funds raised will contribute to the dividend payments incurred. “

Citi, Goldman Sachs International, HSBC, JPMorgan, Morgan Stanley and NCB Capital are working on selling the debt, Aramco said in a filing Monday.

Aramco has not disclosed the amount of the sale, which has already attracted more than $ 20 billion in orders, Reuters reported.

Oil companies around the world are responding to a dramatic drop in demand, as lockdowns linked to the pandemic reduced the need for gasoline and aviation fuel at a time when the market was already well supplied with crude oil.

Weaker demand has focused attention on the strategy of OPEC + producers. The group now plans to delay earlier plans to increase production by around 2 million barrels per day (bpd) from January.

“As a group, we don’t want to give the markets any excuse to react negatively,” Saudi Energy Minister Prince Abdul Aziz bin Salman said at the start of a meeting of the Joint Ministerial Committee on Monitoring the Government. ‘OPEC +.

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