Saudi Aramco to raise $3bn in Islamic bonds

RIYADH: Saudi Aramco is set to raise up to $3 billion through the issuance of US dollar-denominated sukuk, or Islamic bonds.

The financial maneuvre, involves two tranches with durations of five and ten years. The decision to engage in capital markets is indicative of Aramco’s ongoing commitment to diversify funding sources and support its ambitious investment agenda.

Investor calls conducted by multiple banks are scheduled to begin soon, signaling a proactive approach to gauge market interest and optimize the terms of the bond issuance.

Previous bond issuances have proven successful for Aramco, most notably the $6 billion raised in July 2024, which underscores the company’s strong financial standing and investor confidence.

Aramco’s dividends for 2024 are projected at an impressive $124.3 billion, with the majority benefiting the Saudi government, which maintains a majority stake in the company. This substantial flow of capital is critical as the kingdom seeks to transition its economy away from oil dependence, investing in new industries and sustainable growth initiatives.

The participation of prominent banks as active and passive bookrunners illustrates a robust backing from the financial community, which is vital for the successful launch and execution of this sukuk offering.

As global markets remain vigilant to shifts in investment trends, Aramco’s strategic fundraising efforts are positioned to play a crucial role in supporting the long-term economic vision of Saudi Arabia.