Saudi Aramco secures $5bn in bond sale to bolster financial flexibility

Arab News

2 days ago

RIYADH: Saudi Aramco has raised $5 billion through a three-tranche bond issuance under its Global Medium-Term Note Program, the company said.
The senior notes, which were priced on May 27 and listed on the London Stock Exchange, include $1.5 billion maturing in 2030 at a 4.75 percent coupon, $1.25 billion maturing in 2035 at 5.375 percent, and $2.25 billion maturing in 2055 with a 6.375 percent coupon.
This follows Aramco's $6 billion bond sale in July 2024 and comes amid heightened Gulf debt market activity, including Saudi Arabia's Public Investment Fund, which has raised $5.25 billion so far in 2025 through multiple issuances — including a $4 billion bond in January — and Abu Dhabi's Masdar, which recently issued a $1 billion green bond.
Ziad Al-Murshed, executive vice president of finance and chief financial officer at Aramco, said: 'The strong demand for our new bond offering, as reflected in the diversified orderbook, is a testament to global investors' confidence in Aramco's financial resilience and robust balance sheet.'
He added: 'Pricing the offering with no new issuance premium across all tranches clearly reflects Aramco's unique long-term credit proposition.'
The bond offering saw tightened spreads across all maturities, indicating strong investor interest.
The five-year notes were priced at 80 basis points over US Treasuries, while the 10- and 30-year tranches were set at 95 and 155 basis points respectively — each tighter than initial price guidance earlier in the day.
Proceeds from the latest issue will be used for general corporate purposes, as the state oil giant continues to support Saudi Arabia's Vision 2030 diversification strategy.
The issuance comes as Aramco navigates a more challenging environment marked by declining profits and lower crude prices.
The company reported a 4.6 percent drop in first quarter earnings, citing weaker sales and rising operating costs. In March, it announced plans to cut its dividend by nearly a third due to declining free cash flow.
Amid these headwinds, Aramco is also exploring asset sales and capital market strategies to maintain liquidity and finance its global expansion ambitions.
In May, the company published a new prospectus for a sukuk issuance program, signaling potential future activity in debt markets.
The sukuk, also to be listed on the London Stock Exchange, may be issued over the next 12 months.
Meanwhile, Masdar — Abu Dhabi's renewable energy company — also returned to the debt market in May with a $1 billion green bond issuance.
The deal was split into two equal tranches of $500 million each, with maturities of five and ten years and coupon rates of 4.875 percent and 5.375 percent, respectively.
The bond was significantly oversubscribed, receiving $6.6 billion in peak orders, which highlights the growing global appetite for sustainable investment instruments.