Several sources confirmed on Wednesday that Saudi oil group Aramco is currently engaged in talks with multiple banks for the issue of a U.S. dollar-denominated bond. This sale is being sought in order for Aramco to raise money ahead of some major commitments that have been made to its major shareholder, the Saudi Arabian government.
These talks come as no surprise given Aramco’s reputation for issuing bonds. In 2019, the oil group secured its debut bond deal worth $12 billion. This was followed by a five-part transaction in November 2020 to the value of $8 billion.
Despite oil prices declining significantly over the past year, Aramco was able to maintain a promised dividend of $75 billion. One anonymous debit banker made the following statement on the latest talks: “I think it was expected. They need the cash to pay the dividends that have been promised, they’ve done it in the past too.”
According to Bloomberg, the bond deal could be made through Islamic bonds known as sukuk. One anonymous source claimed that the Saudi oil group could raise up to $5 billion through the potential bond deal.
