Aramco Sukuk issuance 2024 sees six times oversubscription, reflecting strong investor confidence

Saudi Arabia’s energy behemoth, Aramco, has raised $3 billion through a highly successful international Sukuk issuance. The offering, which was oversubscribed sixfold, saw two US dollar-denominated tranches of $1.5 billion each. The first tranche, maturing in 2029, offers a profit rate of 4.25%, while the second, maturing in 2034, yields 4.75%. Both tranches were priced on 25 September at a negative new issue premium and are now listed on the London Stock Exchange, highlighting Aramco’s robust credit strength.

This sukuk issuance, part of Aramco’s broader strategy to diversify its funding and expand its investor base, marks another significant step in the company’s return to global debt markets following its July $6 billion bond issuance. Ziad T. Al-Murshed, Aramco’s Executive Vice President and CFO, attributed the overwhelming demand to Aramco’s “unique credit proposition” and its proven resilience across market cycles. The strong investor interest reflects confidence in the firm’s financial health and stability.

The state-owned giant’s fundraising efforts align closely with Saudi Arabia’s Vision 2030 agenda, which focuses on economic diversification and reducing reliance on oil revenue. Aramco is playing a pivotal role in this strategy by expanding its reach into international markets and fostering innovation in sustainability and technology.

Aramco’s long-term plans include further market expansions, especially in Asia and North America, and leveraging its venture capital arm to support disruptive technologies. CEO Amin Nasser highlighted the company’s optimistic outlook, noting that current market challenges present “an excellent opportunity for growth,” reinforcing Aramco’s leadership role in the global energy landscape.

Economists and analysts see this sukuk offering as a testament to Aramco’s commitment to sustaining economic growth while addressing global environmental goals. The company’s forward-looking approach ensures that it remains competitive and adaptable in an ever-changing market, making it a key player in the Kingdom’s energy transition efforts.