Saudi Aramco’s widely anticipated international bond debut may raise as much as $15 billion and attract new investors to the oil-rich Gulf region, which was just added to an emerging markets index.
The world’s biggest oil producer may sell the bonds in the first half of the year, and picked five banks to raise the cash it needs for its planned acquisition of petrochemicals giant Saudi Basic Industries Corp.
Aramco could raise about $10 billion from the bond, Saudi Energy Minister Khalid Al-Falih said last month.
The deal would force the company to disclose accounts for the first time since its nationalization about four decades ago.
Mohieddine Kronfol, Dubai-based chief investment officer global sukuk and MENA fixed income at Franklin Templeton Investments, said: “Companies like Aramco will be considered of very high quality and an issuance such as this would be very well received. Something like $10 billion to $15 billion in size is a possibility.”
“A deal of this size would support the fact that the GCC is now a very significant part of the emerging market landscape,” he added.
Richard Segal, senior analyst at Manulife Asset Management in London, said: "Given the decision not to proceed with the IPO of Aramco, and the long anticipation of this transaction for the country’s biggest company, there will easily be a good deal of interest. Pricing will be straightforward, because companies such as Saudi Electricity Co and Saudi Basic Industries Corp have issued in the recent past, and their bonds trade around 20-35 basis points over the sovereign."For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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