Saudi Aramco sets price guidance for dollar sukuk bonds, term sheet shows

Image credit: Saudi Aramco

Saudi Aramco has set the initial price guidance for 5- and 10-year dollar sukuk bonds, according to a term sheet reviewed by Reuters on Wednesday.

The mainly state-owned oil company seeks to raise up to $3bn in the deal, Reuters reported on Tuesday.

The 5-year bond has price guidance of Treasuries plus around 120 basis points (bps) and the 10-year bond has Treasuries plus about 135 bps, according to the term sheet.

Aramco did not immediately respond to a request for comment sent outside normal Saudi Arabian business hours.

The deal would be Aramco’s second debt market foray since July, after a three-year hiatus. It comes at a time when it is producing about a quarter below its capacity and expects to pay huge dividends, mainly to the government.

Aramco, the world’s top oil exporter, has long been a cash cow for Saudi Arabia, which is pouring billions of dollars into its Vision 2030 plan to create new industries and reduce reliance on oil.

Since July 2023, Aramco has been pumping about 9 million barrels per day (bpd) out of its roughly 12 million bpd of capacity as part of moves coordinated with the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, known as OPEC+.

Earlier this month, OPEC+ agreed to delay a planned oil output increase for October and November after crude prices hit their lowest in nine months, saying it could further pause or reverse the hikes if needed.

Aramco raised $6bn from a three-tranche bond sale in July, its first since it issued the same amount in Islamic bonds in 2021.

Read: Saudi Aramco Q2 profit drops 3.4% on lower volumes, refining margins