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Saudi Aramco has announced initial price guidance for a four-tranche, dollar-denominated bond issue that is expected to raise several billion dollars. The offering spans maturities of three, five, 10 and 30 years, with pricing set at varying premiums over US Treasuries. The move follows recent sukuk and bond issuances after a multi-year absence from debt markets. Amid lower oil prices, Aramco has been cutting costs, reviewing asset sales, and adjusting dividend payouts while continuing to explore multiple funding options.
Saudi Aramco has provided initial price guidance for a four-tranche, dollar-denominated bond offering, according to a term sheet reviewed by Reuters. The proposed issuance is expected to raise several billion dollars and marks another return by the world's largest oil producer to international debt markets. Advertisement
Indicative pricing suggests the three-year tranche is set at about 100 basis points over US Treasuries. The five-year notes are guided at around 115 basis points over the same benchmark, while the 10-year and 30-year bonds are indicated at roughly 125 basis points and 165 basis points over Treasuries, respectively.
The company last accessed debt markets a few months ago through a USD 3 billion sukuk issuance, which followed a USD 5 billion conventional bond sale earlier in the year. Before these transactions, Aramco had remained absent from global debt markets for nearly three years, returning in mid-2024 with a USD 6 billion bond issue.
Aramco has historically been a major source of revenue for the Saudi government. However, amid softer crude prices and rising debt levels, the company announced cost-cutting measures and plans to divest selected assets. These steps were later confirmed by senior management, with reports pointing to the potential sale of certain gas-related facilities.
Dividend payouts for 2025 are estimated at around USD 85.4 billion, representing a decline of about 30% from the previous year as distributions linked to free cash flow eased. The Saudi government directly owns close to 81.5% of Aramco, while the Public Investment Fund holds an additional 16% stake.
Beyond bonds, Aramco has used alternative funding routes. It entered into a USD 11 billion lease-and-leaseback deal for Jafurah gas processing assets with a consortium led by Global Infrastructure Partners, now part of BlackRock. Separately, the Saudi government raised USD 12.35 billion by selling a small stake in the company through a market offering.
The bond sale is being managed by a mix of active and passive bookrunners, with major global banks leading the transaction. Pricing is expected to be finalised later in the day.
Source Reuters
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