Saudi Aramco seeks at least $3 billion from first bond sale in three years
The final deal size could be larger depending on investor demand
Saudi Aramco is looking to raise at least $3 billion from its first bond sale in three years, according to people familiar with the plan.
The world's biggest oil exporter is offering debt with 10-, 30- and 40-year maturities, according to a person with knowledge of the matter. Meetings with fixed income investors are expected to start Tuesday, the person said.
The oil giant has hired banks including Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase & Co., Morgan Stanley and SNB Capital to manage the sale, people familiar with the matter said.
The final deal size could be larger depending on investor demand. A spokesperson for Aramco declined to comment.
The plan to issue debt comes weeks after the Saudi government offloaded an $11.2 billion stake in Aramco. The firm will use funds to refinance existing borrowings and contribute to its investment program.
Chief Financial Officer Ziad Al-Murshed said in February that the firm could look to sell debt with a duration of 15 years to 50 years in 2024 as financial markets improve and the company looks to leverage its massive balance sheet.
Aramco has embarked on a large investment plan to develop new gas resources "- signing construction contracts worth $25 billion for the development of its Jafurah project "- as it looks to boost production.
It sold its first bonds in 2019, followed by 50-year debt in 2020 and issued dollar-denominated Islamic notes in 2021.
In May, Aramco maintained its $31 billion quarterly dividend payout to the Saudi government and other investors despite lower profit. Its free cash flow "- funds from operations minus capital expenditure "- of $22.8 billion in the period was less than the total payout.
The company will continue to pay what it can afford and won't need to issue debt to support the dividend, Al-Murshed said in February. The base dividend will be "sustainable and progressive," meaning the company aims to increase it in coming years, he added.