Saudi Aramco hires bankers ahead of multi-tranch U.S. dollar denominated bond issue

On Monday, oil giant Saudi Aramco stated, ahead of its launch of its U.S. dollar-denominated bond issuance, it has hired a group of banks, in a stock exchange filing.

Saudi Aramco, the world’s biggest oil company is aiming to raise capital midst low oil prices.

In a filing to the stock exchange, Saudi Aramco said, it has hired Goldman Sachs, HSBC, Morgan Stanley, Citi, JPMorgan, and NCB Capital and has arranged investor calls starting from Monday ahead of the planned transaction.

Other banks involved in the transaction includes, First Abu Dhabi Bank, BNP Paribas, BofA Securities, BOC International, Mizuho, Credit Agricole, Societe Generale, MUFG, and SMBC Nikko, shows a document issued by one of the banks on the deal.

A benchmark multi-tranche offering consisting of three-, five-, 10-, 30- and/or 50-year tranches will follow, subject to market conditions and are generally meant to be at least $500 million per tranche.

The development comes in the wake of Gulf issuers showing no sign of slowing down their blitz to tap international debt markets this year as they try to mitigate challenges created by the coronavirus-induced COVID-19 pandemic which has hammered down the demand for oil to a multi-year low.

Issuances from the region so far this year have already shot through last year’s record, again surpassing $100 billion.

Last week, ratings agency Fitch revised its outlook for Aramco to negative from stable, a day after similar action on the sovereign of Saudi Arabia, which holds a controlling stake in the oil giant.

“This reflects the influence the state exerts on the company through strategic direction, taxation and dividends, as well as regulating the level of production in line with OPEC commitments,” said Fitch.

Earlier this month, Aramco reported a 44.6% drop in third-quarter net profit with the pandemic continuing to choke demand and weigh down on crude prices.

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