Saudi Aramco seeks funds through three-part bond sale
May 27 (Reuters) - Oil giant Saudi Aramco (2222.SE), opens new tab is seeking to raise funds through a dollar-denominated three-part bond sale, fixed income news service IFR reported on Tuesday.
The debt deal, which is expected to be priced later in the day, will be benchmark-sized, which is usually considered to be at least $500 million.
Earlier this month, Aramco reported a 4.6% drop in first quarter profits, citing lower sales and higher operating costs as economic uncertainty hit crude markets.
Reuters reported last week that the oil giant is exploring potential asset sales to release funds as it pursues international expansion and weathers the impact of lower crude prices .
Aramco on Tuesday set the indicative price for the five-year debt sale at 115 basis points over U.S Treasuries, while 10-year and 30-year portions carry initial price guidance of 130 and 185 bps respectively over the same benchmark, IFR said.
The company last turned to global debt markets in July last year when it raised $6 billion from a three-tranche bond sale.
Saudi Arabia, which is seeking funds to invest in new industries and wean its economy away from oil under its Vision 2030 plan, has long relied on Saudi Aramco to support economic growth.
Other Gulf issuers have tapped debt markets in recent months, braving a market turmoil caused by U.S. President Donald Trump's tariff policies.
They include Saudi Arabia's $925 billion sovereign wealth fund and Abu Dhabi's renewable energy firm Masdar, which last week raised $1 billion with a green bond.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NBC News
28 minutes ago
- NBC News
Trump ratchets up steel tariffs to 50%
One of America's most storied industries is getting a massive boost from President Donald Trump's latest tariffs push — at the potential cost of a broader slowdown elsewhere in the U.S. economy. Trump signed an executive order increasing the already substantial 25% duties on steel imports he first set in March to 50%. He signaled last week that the tariff rate hike was coming. It went into effect at midnight Wednesday. 'We're going to bring it from 25% to 50% — the tariffs on steel into the United States of America,' Trump said at a rally in Pennsylvania, 'which will even further secure the steel industry in the United States.' The new 50% duties also affect aluminum products. The tariffs on steel, along with those on imported automobiles and auto parts, have been imposed under authorities not affected by recent court decisions that cast doubt on the president's powers to enact trade barriers. U.S. steel firms have hailed Trump's renewed push to raise the cost to American firms that rely on imports of steel. It's a notably favorable reaction to tariffs amid what has broadly been a backlash against them. "American-made steel is at the heart of President Trump's plan to revitalize domestic manufacturing and return our country to an economic powerhouse," the Steel Manufacturers Association said in a statement that applauded Trump's remarks about the new 50% tariffs. Investors have rewarded the steel firms accordingly, sending shares of U.S. steelmakers soaring across the board Monday as U.S. steel and aluminum prices jumped. Today, the steel manufacturing industry directly employs 86,000 U.S. workers. It's a fraction of the half million-strong workforce the industry counted in the decade after World War II, though employment levels have stabilized more recently. While trade globalization bears substantial responsibility for steel's decadeslong downturn, experts say advances in technology have played an equally significant role. Steel production increasingly revolves around so-called electric arc furnace technology, a more efficient means of production than the classic open blast furnace operations that prevailed for much of the 20th century. The same levels of output from steel's heydays can now be achieved with just a fraction of the workforce. As recently as the early 1980s, it took about 10 man-hours to produce a ton of steel. Today, the rate is as little as a single man-hour assuming multiple steel mills are working in tandem. "The way we make steel in the U.S. has changed a lot," said an expert on the local impact of industrial transitions, Ken Kolb, chair of the sociology department at Furman University in South Carolina. "There is simply no way to bring that scale of employment back if a fraction of that workforce is needed to essentially reach the same production levels," Kolb said. He estimated that perhaps 15,000 new direct jobs could be added assuming capacity levels increase. But the broader cost to industries dependent on steel inputs, like autos, construction and solar panels — which relies on tariffed aluminum components — would be likely to negate those gains. "Theoretically you're going to be able to hire some people, but in reality, the tariffs just raise the average price of steel," Kolb said. "And when the price of a commodity like that goes up, businesses just buy less and sideline investment." A study found that while Trump's 2018 steel tariffs created 1,000 new direct jobs, it cost downstream industries that rely on steel to make their products as many as 75,000 jobs because they became less competitive thanks to higher costs. While some limited capacity could come back online in the near term, the on-again, off-again nature of the tariffs limit any immediate job gains, said Josh Spoores, head of Steel Americas Analysis at the CRU Group consultancy. If the higher tariffs remain, there could be new investments, Spoores said in an email — but building new steel mills can take at least two years. Nor is it clear that American steelworkers themselves are entirely in favor of the tariffs. The United Steelworkers union signaled only tepid endorsement for the measure in a statement after its Canadian chapter rebuked Trump's announcement. 'While tariffs, used strategically, serve as a valuable tool in balancing the scales, it's essential that we also pursue wider reforms of our global trading system, working in collaboration with trusted allies like Canada to contain the bad actors and excess capacity that continue to undermine our industries,' the union said. The union has also shown signs of a split when it comes to Trump's proposed "partnership" between U.S. Steel and Japan's Nippon Steel, whose takeover of the U.S. firm he previously opposed. Trump now sees the deal "creating" as many as 70,000 jobs. 'There's a lot of money coming your way,' Trump told supporters at the Pennsylvania rally Friday. The United Steelworkers signaled lingering doubts about the Nippon arrangement in a statement Friday. 'We have not participated in the discussions involving U.S. Steel, Nippon Steel, and the Trump administration, nor were we consulted, so we cannot speculate about the meaning of the 'planned partnership' between USS and Nippon," it said, using an initialism to refer to the American firm. It continued: 'Whatever the deal structure, our primary concern remains with the impact that this merger of U.S. Steel into a foreign competitor will have on national security, our members and the communities where we live and work."
Reuters
30 minutes ago
- Reuters
Rupee falters as bullish exits, dollar strength collide
MUMBAI, June 4 (Reuters) - The Indian rupee slipped on Thursday as a combination of bullish position unwinding and dollar strength pushed the local currency to near the 86 level against the U.S. dollar. The rupee slipped to 85.9125 against the U.S. dollar before paring losses to an extent. It was last quoted at 85.85, down 0.3% on the day. The currency is now on track for its sixth decline in seven sessions, having hit 84.78 last Monday. "The market is backing off earlier long rupee bets," said a currency trader at a bank. "You can see that in the price action. Its not helping that the dollar overall has found a bit of footing and we are seeing equity outflows.' Foreign investors pulled out more than $300 million from domestic equities on Wednesday, according to preliminary data, adding to outflows of more than $1 billion in the previous three sessions. Meanwhile, the dollar index inched higher, extending Tuesday's advance that was underpinned by an unexpected rise in U.S. job openings. More labour market data is due through the week, with the key highlight being Friday's non-farm payrolls report for May — a key input for assessing the Federal Reserve's interest rate path. Asian currencies were mostly weaker, with sentiment dominated by developments around trade negotiations between the U.S. and its partners. The Trump administration has set a Wednesday deadline for countries to submit their best trade offers. President Donald Trump is expected to speak with Chinese President Xi Jinping this week, according to the White House. The call comes amid renewed tensions, with both sides accusing each other of breaching last month's agreement to roll back certain tariffs.
Telegraph
36 minutes ago
- Telegraph
Trump cornered as China weaponises its rare-earths dominance
When or if Donald Trump gets on the phone with Xi Jinping, the tone between the two men is likely to be frosty. The US and China have in recent days both accused each other of violating their fragile, three-week-old trade truce. The two presidents are expected to speak this week in an effort to rescue the deal. But Trump has a tough pill to swallow: it is his arch-rival who looks to have the better negotiating hand. China's near-total dominance of the world's supply of rare-earth metals – which are used in the manufacture of everything from cars and computer chips to F-35 fighter jets and nuclear-powered submarines – means Xi can squeeze the US where it hurts. 'Critical minerals are one of the most important bargaining chips for China in its negotiations with Washington. China will really hold on to this, as a significant point of leverage,' says Matilda Buchan, a senior analyst at Asia House, a London think tank. Beijing's willingness to weaponise the rare-earths supply chain is so potent a threat to the US economy and military that it has already pushed the White House into de-escalating its planned trade war with China. After Trump's April 2 'liberation day' announcement raised tariffs on US imports from China to an eventual peak of 145pc, Beijing's retaliation included a ban on exports to the US of magnet alloys containing key rare-earth materials. The impact was quickly felt. On May 9, some of the biggest carmakers in the US – including General Motors, Toyota, Volkswagen and Hyundai – wrote to the White House warning that unless China's export ban was lifted, they would soon have to start cutting back production. That same day, Trump told his Truth Social followers that he was ready to make big concessions to get a deal with China. Negotiations in Geneva took place over the ensuing weekend, and the tariffs came tumbling down. It emerged, more quietly, in subsequent days that China would allow rare-earths exports to the US to resume. 'Major disruption' Last Friday, though, Trump was back on Truth Social claiming that China had 'TOTALLY VIOLATED ITS AGREEMENT WITH US'. Jamieson Greer, the president's trade envoy, told CNBC that Beijing was 'slow-rolling' its issuance of licences to export products containing rare earths. 'We haven't seen the flow of some of those critical minerals as they were supposed to be doing,' he said. The question is whether China is actively frustrating the deal, as some White House officials reportedly suspect, or whether the explanation is more mundane: not a grand conspiracy but simply a system coming to grips with new red tape. Back in April, Beijing did not just slap a ban on exports, it built a new bureaucratic structure to underpin future rare-earths trade. China-based companies wanting to export metal alloys containing more than a trace of seven key rare earths – samarium, gadolinium, terbium, dysprosium, lutetium, yttrium and scandium – now need to apply for a licence from the commerce ministry. It was not initially clear which shipments would be caught by the new rules, and there was plenty of precautionary laboratory testing, even of exports that were below the rare-earth content threshold. 'What initially looked like an almost total freezing of exports from China was really just a response to this need for testing of all the material, and of any material which contained more than 0.1pc of any of these elements,' says David Merriman, the research director at Project Blue, a critical minerals analysis and advisory firm. Project Blue's analysis suggests the application process is taking about 45 days, which may explain why exports to the US have been slower than expected. By mid-May, six large companies had received export licences, and at least another three were in the process of doing so. 'We are seeing some approvals come through, certainly slower than industry would like,' Michael Hart, president of the American Chamber of Commerce in China, told Bloomberg this week. 'Some of the delay is related to China working through their new system to approve exports, not that they are not allowing exports.' As part of the Geneva trade deal between the US and China, the commerce ministry has taken 28 US businesses off its export-control blacklist. But exports will still have to be approved on a shipment-by-shipment basis, and none is so far bound for the US. Volkswagen's European operations appear to have been an early beneficiary of an export licence, but not in sufficient quantities to ease supply concerns. 'There are a few approvals coming through, but they are far from being sufficient to prevent imminent production halts,' Jens Eskelund, the president of the European Union Chamber of Commerce in China, told the New York Times. 'We are still facing a major disruption of supply chains.' Trump cornered The threat of factory production lines grinding to a halt highlights the immense power of China in this crucial market, and the power of its hand in negotiations. China's mines churn out about 61pc of the world's rare earths, according to the International Energy Agency (IEA). Chinese refiners and manufacturers also hoover up most of the rare earths from elsewhere, processing 92pc of the world's supply. It is refining that is key, as this is the process that turns the material into a usable product. The country has a particular stranglehold on the manufacture of magnet alloys containing rare earths, which have near-ubiquitous application in computing, vehicular and electrical systems. 'Particularly as you move further down the supply chain, from mined products towards downstream highly engineered products, China's market share only grows,' Merriman says. 'Its grip only gets tighter.' Rare earths are used in very small quantities, which means it has long been uneconomic for most countries to mine or refine them – most, that is, except China, where the industry is under state control. The US has been spearheading sporadic efforts to restart rare-earths production and magnet manufacture either at home or in friendlier countries. But these efforts are yet to bear real fruit. The IEA estimates that a decade from now, China will still account for 85pc of refined rare-earths output. This leaves Trump cornered. He has been talking up the prospects of Ukraine and Greenland as alternatives, but his presidency will be long gone before either of those becomes a realistic option. Tariffs are no use here either. His only weapon is semiconductors. Over the past month, the US has been gradually tightening controls over China-bound exports of chips and associated software, particularly those used in artificial intelligence. The chips squeeze is partly motivated by the White House's long-term strategic desire to retain technological supremacy over China. But it also has some immediate tactical trade leverage – as Howard Lutnick, the US commerce secretary, admitted on Sunday. '[We are] taking certain actions to show them [the Chinese] what it feels like on the other side of that [export ban] equation,' he told Fox News. This has riled Beijing. 'The United States has unilaterally provoked new economic and trade frictions,' the Chinese commerce industry said in a statement on Monday. 'These practices seriously violate the consensus.' Despite the war of words, Lutnick claimed he was confident that Trump would 'work it out' with Xi. Perhaps his confidence is well-founded. With the US and Chinese tech and manufacturing industries hanging in the balance, a deal looks essential for both sides.
