Aramco Bond Deal to Close on Wednesday – Saudi Energy Minister

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Saudi Energy Minister Khalid Falih said that he hopes to finalise Aramco’s Saudi Basic Industries Corporation (SABIC) acquisition within six months.

Falih said that he believes the demand for Aramco bonds is “north of” $30 bln.

According to him, the Aramco bond deal will be finalised on Wednesday.

The sale of bonds represents an alternative way for Saudi Aramco to generate capital and diversify after its IPO was postponed last year.

The placement has attracted the attention of both investors in emerging market bonds and developed-market funds with investment grade ratings. Investors expect Saudi Aramco bonds to be rated at a level similar to sovereign debt. Earlier this year, the government of Saudi Arabia issued 10-year dollar-denominated bonds with a yield of 4.38%, which subsequently fell to 3.77% as the price of the bond rose.

Aramco produces approximately 13 percent of the world’s oil, but it finds itself under substantial pressure from shale producers in North America, as well as its old rivals, such as BP and Total.

Sputnik

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