Saudi Aramco announces a multi-million dollar debt issue

Saudi oil company Aramco plans a multi-million dollar debt issue. The current pandemic has led to a drop in both gasoline and aviation fuel consumption, which has prompted the company to consider a debt issuance at the international level.

Aramco has chosen Citi, Goldman Sachs International, HSBC, JPMorgan, Morgan Stanley and NCB Capital as organisers and distributors of the debt issuance programme. 

The organisers and distributors held a series of meetings with fixed income investors on November 16. The Saudi state-owned company plans to issue bonds of various maturities, ranging from a minimum of 3 years to a maximum of 50 years.  The debt issue is announced after Aramco announced a fortnight ago the distribution of a dividend of 18,750 million dollars (63,335 million euros).

The return to the debt market comes one week after Fitch downgraded Aramco's outlook from stable to negative, following the downgrade of Saudi Arabia's sovereign debt. The COVID-19 crisis has had a direct impact on Aramco's accounts.

Aramco made its debut on the stock market in December 2019, making the biggest stock market debut in history. The Saudi state oil company raised 23.3 billion euros. In the same way, it is considered one of the companies with the highest profits in the world and its net attributable profit reached 35,015 million dollars in the first nine months of this year, which represents a fall of 48.6% with respect to the same period in 2018.  

Low oil prices are encouraging companies across the region to take advantage of the debt markets, which has already spurred bond issuance beyond last year's record and across the $100 billion barrier.

According to Goldman Sachs, this practice is expected to continue next year with total debt issuance reaching $140 billion. Most of this amount will come from the Gulf States and Latin America.