Economy

Aramco breaks record as demand for its bond tops $85 billion

Aramco breaks record as demand for its bond tops $85 billion”

Aramco made $111 billion in net profit past year, making it the most profitable company in the world.

It's rare for bonds of a state-owned company to pay less than the sovereign debt and the demand reflects intense investor appetite for high-quality paper.

Sergey Dergachev, functional head of EM corporate debt at Union Investment, said he expected the bond to have four tranches of three, five, 10 and 30 years and to range between $10-billion and $15-billion in size.

Aramco was expected to raise around $10 billion from the deal, which will be priced later in the day and is seen as a gauge of potential investor interest in the Saudi company's eventual initial public offering.

The company opened up a six-stage bond sale on Monday, with investors across Europe, Asia and North America pledging over $30 billion on the first day.

Saudi Aramco's landmark deal to raise $10bn secured investor offers of more than ten times this amount to breach the $100bn (£77bn) mark in a record for an emerging market debt deal. Orders tracked upwards to $85 billion by Tuesday, with pricing expected later Tuesday.

The order book for Aramco expanded from about $40 billion when the deal kicked off, people with knowledge of the deal said. In effect, Saudi Crown Prince Mohammed bin Salman, who runs the country day-to-day, is using the state oil producer's pristine balance sheet to finance his ambitions.

Books on Saudi Aramco's United States dollar bond offering have swelled to more than US$60bn, four investors told IFR on Monday. The offering also includes a three-year floating rate bond. But increased global investor appetite for the issue would reassure Aramco and the Kingdom that its appeal in worldwide markets remained as strong as ever.

Aramco has lined up a roster of global banks supporting its jumbo bond deal, another indication of how the mood in Wall Street toward the kingdom has changed.

JPMorgan and Morgan Stanley are managing the bond sale along with Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings, and NCB Capital.

Aramco is raising money as bond investors search for higher yields.

The bond, announced last week, follows on the heels of Aramco's agreement to buy a 70 percent stake in petrochemicals firm Saudi Basic Industries from Saudi Arabia's Public Investment Fund (PIF) in a deal worth $69.1-billion. Emerging-market bond sales have made a record-breaking start to the year, with issuance among all currencies already climbing above $600 billion, according to Bloomberg league table data.



Like this

loading...
loading...

Latest


12 Апреля 2019
Michael Avenatti faces 36-count federal indictment
Kelly by giving the Chicago state's attorney's office what he said was a tape of the performer having sex with an underage girl. He was also charged with wire and bank fraud for allegedly using a client's settlement money to pay for own personal expenses.

12 Апреля 2019
William Barr: Censored Mueller report close to release
Barr said he did not believe the evidence in the report was sufficient to prove the president had obstructed justice. Barr also revealed at the hearing that Mueller was given a chance to review the March 24 letter, bu he declined.

11 Апреля 2019
The First Picture Of A Black Hole Was Taken By A Woman
Its mass - the chief measurement of a black hole - is 6.5 billion times as much as our sun's. In fact, the researchers had generated several photos and they all looked the same.

11 Апреля 2019
Nipsey Hussle’s Mother Has A Message For His Grieving Fans
Fans from across the globe will be able to say their final goodbye to Nipsey Hussle on Thursday (April 11). EST) and Tidal has made a decision to live stream the ceremony for members and non-members.

11 Апреля 2019
Meet Katie Bouman, woman behind first black hole photo
But, as news broke about the monumental discovery, Bouman's crucial contribution to the project appeared to go largely overlooked. The image of M87 will occupy scientists for weeks, months and even years to come as they analyze it from every perspective.

11 Апреля 2019
Measles Outbreak: NYC declares emergency, orders vaccinations in part of Brooklyn
At least 285 people have contracted the disease in the city since September, mostly in Brooklyn's Williamsburg neighbourhood. That's the point of vaccines - safe ways of making people immune to infections with limited side effects.

11 Апреля 2019
Thousands of Amazon workers hired to listen to recordings from Alexa
E-commerce major Amazon is the leader of this space as the company offers plethora of Alexa-enabled Echo smart speakers . The popularity of smart speakers has grown exponentially since they were first introduced to the United Kingdom in 2016.

11 Апреля 2019
The Galaxy S10 5G Already Has a Big Problem
Well, since then Samsung has been facing issues with the device as complained by some early adopters. For a smooth transition between 5G and LTE networks, base stations need to be tweaked accordingly.

11 Апреля 2019
Furious neighbor dismantles dentist’s ‘sexy’ lawn display in NJ
WPIX reported Gangi said the display was not really for Easter, but to pay homage to Playboy magazine founder Hugh Hefner. But the display's owner says it will soon be back up. "I got a son, you know, he's 16 years old", she said.

11 Апреля 2019
Rugby internationals Holmes, Wade join National Football League practice squads
NY announced it would be adding Valentine Holmes , a former professional rugby player from Australia's National Rugby League. Holmes represented Australia at the 2017 Rugby World Cup, scoring 11 tries, which is the rugby equivalent to a touchdown.