Saudi Aramco, the world’s biggest oil firm, is expected to price later on Tuesday a three-part bond in U.S. dollars as a campaign to raise funds, IFR news service reports.
The bond sale is set to be benchmark-sized, which typically means the issue would be of at least $500 million.
Saudi Aramco is also reportedly exploring asset sales as a means of increasing the availability of funds to fuel its international expansion and existing operations, according to unnamed sources who spoke to Reuters.
At the end of last year, Saudi Aramco’s chief financial officer, Ziad Al-Murshed, said that the oil giant plans to regularly tap the bond market for debt issuance as it looks to optimize capital structure and widen its investor base.
Aramco returned to the debt market in 2024, following three years of absence, with two bond issues in which it sold a combined $9 billion in debt.
In July, Aramco completed a bond issuance of $6 billion, with the offering more than six times oversubscribed, based on the initial targeted size of $5 billion.
Then in October, the Saudi state oil giant completed a $3-billion Islamic bond issuance, which also saw strong demand and was six times oversubscribed.
Saudi Arabia relies on income from oil exports and Aramco’s dividend payouts to finance an ambitious Vision 2030 program, with which the Saudi Crown Prince, Mohammed bin Salman, wants to turn the Kingdom into an investment-friendly destination of doing business and grand projects to reduce reliance on oil.
The recent oil price crash will surely hit Saudi Arabia’s state finances going forward, but the Kingdom already booked a hefty budget deficit for the first quarter, before oil prices dropped dramatically.
During the first quarter of the year, the budget deficit of the world’s top crude oil exporter swelled to $15.6 billion (58.7 billion Saudi riyals), data from the Saudi Finance Ministry showed earlier this month.
That’s already more than half of the deficit the Kingdom had forecast for the full year in its FY 2025 budget statement— a deficit of $27 billion (101 billion riyals), which represents about 2.3% of Gross Domestic Product (GDP).
By Charles Kennedy for Oilprice.com
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