Saudi Aramco has recently announced the issuance of US dollar-denominated international sukuk or Islamic bonds, as part of the Trust Certificate Issuance Program of the SA Global Sukuk Limited. The offering, which will run until October 2, will have its value determined based on market conditions and investor demand at the time of the offering. The minimum subscription for investors will be $200,000, with integrated multiples of $1,000 in excess of that amount, subject to market conditions. The issuance of the sukuk involves several leading financial institutions as active bookrunners, including Al Rajhi Capital, HSBC, and JP Morgan, among others.
In addition to the active bookrunners, there are also inactive bookrunners involved in the issuance of the sukuk, such as SMBC Nikko, Alinma Investment, and Albilad Capital. The net proceeds from the offering will be used by Saudi Aramco for general corporate purposes. The issuance of the trust certificates will be limited to qualified investors in the jurisdictions in which the offering will take place, in accordance with the rules and regulations of those jurisdictions. The trust certificates issuance will also be subject to the approval of official authorities and will be carried out in accordance with the Rule 144A/Reg S offering requirements under the U.S. Securities Act of 1933.
The stabilization rules of the Financial Conduct Authority (FCA) and the International Capital Market Association (ICMA) will apply to the issuance of the trust certificates. An application will be made for the trust certificates to be admitted to the official list of the FCA and to the London Stock Exchange plc, as well as for the trust certificates to be admitted to trading on the London Stock Exchange’s main market. The target group for the issuance is qualified institutional investors in the countries where the offering will take place, in compliance with the applicable laws and regulations in those countries, as disclosed by Aramco.
The issuance of the sukuk is a strategic move by Saudi Aramco to raise funds for its general corporate purposes. By involving leading financial institutions as bookrunners, the company is able to attract a wide range of investors and ensure the success of the offering. The trust certificates will be issued in accordance with regulatory requirements, including the Rule 144A/Reg S offering requirements under the U.S. Securities Act of 1933, to ensure compliance with international standards.
The involvement of both active and inactive bookrunners in the issuance of the sukuk demonstrates the broad support for the offering from the financial community. The trust certificates will represent direct, unsubordinated, unsecured, and limited recourse obligations of SA Global Sukuk Limited, offering investors a secure investment opportunity. The net proceeds from the offering will be used by Saudi Aramco for its general corporate purposes, providing the company with the necessary funds to support its operations and growth initiatives.
Overall, the issuance of US dollar-denominated international sukuk by Saudi Aramco is a significant development in the company’s capital-raising efforts. By tapping into the Islamic finance market, Aramco is diversifying its funding sources and reaching out to a broader investor base. The successful completion of the sukuk offering will not only benefit the company financially but also enhance its reputation as a leading player in the global energy industry.
