Saudi Aramco likely to issue a bond in 2024 – CFO

Saudi Aramco intends to issue a bond this year, with a focus on longer maturities extending up to 50 years, according to Chief Financial Officer Ziad Al-Murshed.

Al-Murshed mentioned during the Saudi Capital Markets Forum in Riyadh that this issuance is part of the company’s strategy to optimize its capital structure. In 2021, Aramco last accessed global debt markets, raising $6 billion through the sale of a three-tranche sukuk, or Islamic bond.

Gulf entities, including governments and companies, have been swift in tapping into debt markets since the beginning of the year to capitalize on the recent decline in global interest rates. In January alone, oil-rich Saudi Arabia issued $12 billion worth of dollar-denominated bonds.

Last month, the Saudi energy ministry instructed Aramco to cease its plans to increase its maximum sustainable capacity to 13 million barrels per day (bpd), reverting to the previous target of 12 million bpd.

Aramco is set to announce its annual financial results and dividend payments in March, having introduced a special, performance-based dividend last year. The Saudi state, being Aramco’s largest shareholder by a significant margin, heavily relies on its substantial payouts.

Nevertheless, according to three individuals familiar with the matter who spoke to Reuters earlier this month, the country is on the brink of selling more Aramco shares. This move could enhance the country’s funding and support its goal of diversifying the economy away from oil.

 

When asked about such reports, Al-Murshed stated that he couldn’t comment as it was not within the purview of the company’s affairs. “decision as to the sale of existing government shares”.

Bloomberg estimates that the share sale could generate approximately $20 billion, though Saudi Aramco has not officially confirmed this figure.

In late 2019, Aramco concluded the world’s largest initial public offering, raising $25.6 billion, and subsequently sold more shares to increase the total to $29.4 billion.