Aramco issues second installment of international bonds

Aramco issued the second installment of international bonds in November creating high demand among global investors. This successful installment followed the company’s inaugural bond issuance of $12 billion in April 2019. 

It is an exceptional outcome for an issuer returning to the market post-debut to receive approximately $50 billion order book (approximately 10x oversubscription) on the initially planned $5 billion bond size — the largest emerging markets order book in 2020.  

Given this significant demand, the company ultimately upsized the offering and issued $8 billion in bonds, divided between five tranches, including a $2.25 billion 50-year tranche. 

The bonds were placed with over 500 investors globally.

The substantial order book is a testament to Aramco’s global standing.  

This milestone comes in a year replete with challenges for companies and nations around the world in light of the COVID-19 pandemic impact on the world economy in general, and particularly on energy companies.

The company’s success during this second bond issuance is a continuation of the previous success that accompanied the first bond issue last year, when the company received orders in excess of $100 billion, where it issued bonds valued at $12 billion.

Aramco met with more than 500 investors through a virtual roadshow. In addition, the offering attracted more than 150 new investors in Asia, Europe, the United States, and the Kingdom of Saudi Arabia — another sign of the confidence the company enjoys in world capital markets.

The financial position of Aramco remains strong despite the challenges facing the world’s energy sector this year.
— Khalid H. Al-Dabbagh, senior vice president of Finance, Strategy and Development

Al-Dabbagh added: “The key indicator of the company’s excellence is represented in its strong performance, fiscal discipline, transparency, governance, risk management, and operational excellence in all its operations.”

He explained that the company’s recent success reflects investors’ confidence in Aramco in particular, and the Kingdom in general, as the bonds were purchased by investors from all over the world. 

This showed investor confidence in the company’s direction and its high degree of transparency and reliability in its performance, Al-Dabbagh said.