{"id":90233,"date":"2024-10-06T00:00:00","date_gmt":"2024-10-06T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/10\/06\/aramcos-usd-3-bn-sukuk-issuance-was-6x-oversubscribed\/"},"modified":"2024-10-06T00:00:00","modified_gmt":"2024-10-06T00:00:00","slug":"aramcos-usd-3-bn-sukuk-issuance-was-6x-oversubscribed","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/10\/06\/aramcos-usd-3-bn-sukuk-issuance-was-6x-oversubscribed\/","title":{"rendered":"Aramco\u2019s USD 3 bn sukuk issuance was 6x oversubscribed"},"content":{"rendered":"

Aramco\u2019s <\/strong>USD 3 bn international sukuk issuance<\/strong> was <\/strong>6x <\/strong>oversubscribed<\/strong>, it said in a statement<\/a>. The Shariah-compliant issuance<\/a> \u2014 which was listed on the London Stock Exchange \u2014 was split into two equal tranches of five- and 10-year maturities. The shorter tranche carries an annual yield of 4.25%, while the longer one has a 4.75% yield. This is the second time Aramco taps international debt markets this year after closing its first bond sale in three years<\/a> in July, raising USD 6 bn. <\/p>\n

Where the money is going: <\/strong>The oil giant earmarked the fresh funds for enhancing its liquidity position, the statement reads without elaborating further. Aramco\u2019s dividend payments exceed the freecash flow (FCF) the company is generating<\/a>, putting it in a net negative FCF position that is \u201cunsustainable,\u201d Bloomberg reported back in August. To sustain these dividends, the world\u2019s largest oil company may need to take on more debt, the business information service said. <\/p>\n

The issuance is unsubordinated + unsecured: <\/strong>The issued trust certificates are unsubordinated, which means they are not inferior to other debt held by the issuer in terms of repayment priority, according to a disclosure to Tadawul<\/a>. They are also unsecured, indicating that no specific assets are held as collateral to back the issuance, while certain assets are directly tied to it. The certificates are also limited recourse obligations which means if the issuer defaults and the assets directly tied to the issuance are insufficient for repayment, investors can\u2019t pursue the issuer\u2019s other assets. <\/p>\n

ADVISORS- <\/strong>Al Rajhi Capital, Citigroup, Dubai Islamic Bank, First Abu Dhabi Bank, Goldman Sachs International, HSBC, JPMorgan, KFH Capital, and Standard Chartered, among other GCC-based banks, acted as active joint bookrunners for the issuance, according to a disclosure to Tadawul<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This is an unsubordinated and unsecured issuance<\/p>\n","protected":false},"author":1,"featured_media":90234,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2590],"tags":[139,2419,57,10,118],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-90233","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-debt-watch","tag-aramco","tag-capital-markets","tag-debt-watch","tag-enterpriseam-ksa","tag-sukuk","wpautop","entry"],"acf":{"mongo_id":"1335d715-7036-4b18-a633-57175f8e2e4f","order":"4","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/10\/370.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Aramco\u2019s multiple-tranche USD 3 bn sukuk issuance was 6x oversubscribed","related_issue":[90226],"teaser":"This is an unsubordinated and unsecured issuance","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/10\/.3cf02d09-8376-4d44-baa5-51acf95a097d.mp3"},"yoast_head":"\nAramco\u2019s USD 3 bn sukuk issuance was 6x oversubscribed - 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