Finance Aramco’s $3bn sukuk oversubscribed six times By Pramod Kumar October 3, 2024, 6:54 AM Reuters Aramco says the sukuk will diversify and broaden its investor base Saudi Aramco, the world’s largest oil producer, said its $3 billion sukuk was oversubscribed by six times. The sukuk was issued in two US dollar-denominated tranches, each valued at $1.5 billion. The tranches, maturing in 2029 and 2034, carry annual profit rates of 4.25 percent and 4.75 percent, respectively, the company said in a statement. Both the tranches were priced with a negative new issue premium, reflecting Aramco’s strong credit profile. The company says the issuance will diversify and broaden Aramco’s investor base, enhancing liquidity and re-establishing its sukuk yield curve. The sukuk has been listed on the London Stock Exchange. Aramco to buy AI chips from Abu Dhabi fund-backed Cerebras Analysts bullish on Aramco despite share price drop Aramco returns to debt markets after shares sale Sukuk are sharia-compliant bonds that were developed as an alternative to conventional bonds, which are not considered permissible by many Muslims as they pay interest and may finance businesses involved in activities not allowed under Islamic law. Last month, Aramco launched US dollar-denominated sukuk as part of its fund-raising strategy. The oil producer reported a 9 percent decline in net profit to SAR212 billion ($56 billion) in the first half of 2024 as a result of lower crude oil volumes sold, weakening refining margins and lower finance income. The company plans to launch nearly 100 projects in the next three years to modernise existing oil and gas facilities and increase output and treatment capacities. Its capital investments are expected to be between $48 billion and $58 billion in 2024, against $49.7 billion last year. The company plans to increase spending until around the middle of this decade.
