Saudi Aramco hires banks for debut dollar Islamic bond sale

SourceGulf Business
SectorFinancial Markets
CountrySaudi Arabia

Saudi Aramco, the world’s biggest energy company, has hired banks for its first ever dollar-denominated Islamic bonds. The state-controlled company may offer three tranches of notes due in three years, five years and 10 years, according to a person familiar with the matter. Islamic bonds, or sukuk, comply with the religion’s teachings, including its ban on interest.

The firm is raising cash to help fund its commitment to pay out $75bn in dividends, a pledge Aramco made to drum up support for its initial public offering. But with the spread of the coronavirus and widespread lockdowns curbing demand for oil last year, the price of Brent crude plunged to just below $16 a barrel at one point in 2020, the lowest since 1999. That prompted Aramco to reduce spending, cut jobs and sell non-core assets. The price of oil, Saudi Arabia’s main source of revenue, has since climbed more than four-fold to over $70 a barrel. And while...read more...