Saudi Aramco (2222.SE) is poised to issue a bond this year, with a focus on longer maturities of up to 50 years, revealed Chief Financial Officer Ziad Al-Murshed on Monday.
Al-Murshed articulated that this planned issuance aligns with the company’s strategy to optimise its capital structure, addressing an audience at the Saudi Capital Markets Forum in Riyadh.
The last venture into global debt markets by Aramco occurred in 2021, wherein it secured $6 billion through the sale of a three-tranche sukuk, or Islamic bond.
Since the onset of the year, there has been a rush among Gulf companies and governments to exploit the recent declines in global interest rates.
Notably, oil-rich Saudi Arabia seized this opportunity by issuing $12 billion worth of dollar-denominated bonds in January.
Al-Murshed acknowledged a preceding period of market inactivity due to instability, highlighting a current trend towards market stability that is likely to spur increased activity.
However, the Saudi energy ministry intervened last month, instructing Aramco to suspend plans aimed at elevating its maximum sustainable capacity to 13 million barrels per day (bpd), reverting to the previous target of 12 million bpd.
The forthcoming month holds significance for Aramco as it prepares to unveil its annual financial results and dividend declarations in March.
Last year, the introduction of a special, performance-based dividend marked a significant development.
While the Saudi state remains Aramco’s primary shareholder, heavily reliant on its substantial payouts, there are indications of a potential sale of more Aramco shares.
Al-Murshed refrained from commenting on such reports, asserting that decisions regarding the sale of existing government shares are not within the company’s purview.
According to Bloomberg, the anticipated share sale could yield approximately $20 billion, although Saudi Aramco has yet to confirm this figure.
Aramco’s journey since its completion of the world’s largest initial public offering in late 2019, which initially raised $25.6 billion and was later augmented through additional share sales to reach $29.4 billion, reflects its continued evolution in the global financial landscape.