Saudi Aramco recently completed a $3 billion dollar-denominated international sukuk offering, which saw six times oversubscription due to strong investor demand. The offering consisted of two tranches: $1.5 billion maturing in 2029 with a profit rate of 4.25 percent per annum, and another $1.5 billion maturing in 2034 with a profit rate of 4.75 percent per annum. The sukuk issuance was priced on September 25, 2024, and the securities were listed on the London Stock Exchange with a negative new issue premium. This successful offering is part of Aramco’s efforts to diversify and broaden its investor base, enhance liquidity, and re-establish its sukuk yield curve.
Aramco’s Executive Vice President and CFO, Ziad T. Al-Murshed, stated that the remarkable demand for the sukuk offering reflects Aramco’s unique credit proposition, competitive advantage, and track record of financial resilience through cycles. This issuance followed the success of a three-tranche sukuk in July, in which Aramco raised $6 billion under its Global Medium Term Note Program. Leading financial institutions, including Al Rajhi Capital, HSBC, and JP Morgan, served as active bookrunners for the sukuk offering. Inactive bookrunners included SMBC Nikko, Mizuho, and Natixis, among others.
The net proceeds from the sukuk offerings will be used by Saudi Aramco for general corporate purposes. The trust certificates were offered to qualified investors in accordance with the rules and regulations of the jurisdictions in which the offering was made. The successful issuance of the sukuk builds on Aramco’s commitment to engaging with a broader investor base and enhancing its financial profile. The company’s strong credit profile and track record make it an attractive option for investors seeking stable returns and investment opportunities in the energy sector.
The sukuk issuance is part of Saudi Aramco’s Trust Certificate Issuance Program managed by SA Global Sukuk Limited. The offering period ran through October 2, with a minimum subscription of $200,000 and integrated multiples of $1,000 in excess of that amount. The offering represents direct, unsubordinated, unsecured, and limited recourse obligations of SA Global Sukuk Limited. With the success of this sukuk offering, Aramco aims to further establish its presence in the international financial markets and strengthen its position as a leading player in the global energy industry.
Overall, the completion of the $3 billion dollar-denominated international sukuk offering by Saudi Aramco underscores the company’s strong credit profile, financial resilience, and attractiveness to investors. The issuance, which saw six times oversubscription, reflects strong investor demand and the company’s ability to engage with a diverse investor base. By diversifying its investor base, enhancing liquidity, and re-establishing its sukuk yield curve, Aramco continues to strengthen its position in the global financial markets and establish itself as a leading player in the energy sector.
