Saudi Aramco may is­sue US$10bil bond for Sabic deal

King­dom will de­cide in ‘next few weeks’ on size of is­suance

The Star Malaysia - StarBiz - - Foreign News -

DUBAI: Saudi Aramco could tap the bond mar­ket for about US$10bil to help fund the ac­qui­si­tion of petro­chem­i­cals gi­ant Saudi Ba­sic In­dus­tries Corp (Sabic), ac­cord­ing to the coun­try’s En­ergy Min­is­ter Khalid Al-Falih (pic).

The king­dom will de­cide in the “next few weeks” about the size of the pro­posed bond, though the of­fer­ing would not be “huge”, Al-Falih told re­porters in Abu Dhabi. “It will be prob­a­bly in the US$10bil range.”

Aramco plans to tap the mar­ket in the se­cond quar­ter, sell­ing its first in­ter­na­tional bond and forc­ing the world’s largest oil pro­ducer to dis­close its ac­counts to in­vestors for the first time since its na­tion­al­i­sa­tion roughly four decades ago.

It may also have to make pub­lic about oil re­serves and op­er­a­tions.

Aramco is in talks to buy a 70% share in Sabic from the Pub­lic In­vest­ment Fund, which could cost about US$70bil.

Some had ex­pected the po­ten­tial bond to rank among the largest is­sued by a com­pany if Aramco planned to fi­nance a large chunk of the Sabic deal with it, though Al-Falih last week played down chat­ter in the mar­ket that Aramco would fund the en­tire deal with the bond of­fer­ing.

Saudi Ara­bia last week sold US$7.5bil of in­ter­na­tional bonds in the first test of how much dam­age the killing of colum­nist Ja­mal

de­tails Khashoggi in­flicted on in­vestor ap­petite. While early indi­ca­tions showed the king­dom would have to pay up, the pre­mium nar­rowed sub­stan­tially as the day went by.

Fi­nance Min­is­ter Mo­hammed Al-Jadaan said in De­cem­ber the na­tion in­tended to sell about 120 bil­lion riyals (US$32bil) of lo­cal and for­eign cur­rency debt this year to help fi­nance its deficit. — Bloomberg

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