Saudi Aramco to sell $ 6B worth of Islamic bonds | Business և economics news

Order books for the sale of Islamic bonds or oysters for more than $ 60 billion, people familiar with the matter told Bloomberg News.

From Bloomberg

The world’s largest energy company, Saudi Aramco, is selling $ 6 billion worth of bonds in its first sale of Islamic bonds.

The state-controlled company offers a sukuk in three, five to 10 years, the longest part of which will receive 120 key points above the Treasury, says a person familiar with the matter. This is less than the initial discussion of about 160 basic points.

Books for sale worth more than $ 60 billion, say people familiar with the deal, who asked not to be named because the details are private.

The company is raising cash to finance $ 75 billion in dividends to fund its plans, a commitment the oil company has made to support its initial bid. Aramko had to cut costs, cut jobs, sell non-core assets as the spread of the coronavirus, and widespread blockades, curbed demand for oil last year, Saudi Arabia’s main source of revenue.

The price of Brent crude oil has declined after falling to a 21-year low at one point in 2020, which was slightly below $ 16 per barrel.

And while Aramco’s first-quarter profit rose on both its “raw materials and gas” recovery, its free cash flow fell to $ 18.75 billion needed to pay dividends for the period.

Aramco’s oil revenue is about 40% of Saudi Arabia’s gross domestic product, and recent rise in commodity prices could push it even higher, Bloomberg Intelligence analyst Imin Amin Patel and Damian Sassauer wrote in a note on Tuesday. They say Saudi Arabia’s plans to reduce its dependence on Aramco will challenge the nation’s fiscal deficit.

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