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Saudi Aramco begins sale of dollar-debt bonds to raise funds for megaprojects

July 10, 2024 at 8:11 pm

This picture shows Aramco tower (C) at the King Abdullah Financial District (KAFD) in Riyadh on April 16, 2023 [FAYEZ NURELDINE/AFP via Getty Images]

Oil giant, Saudi Aramco, has begun the sale of dollar-denominated debt for the first time in three years, reportedly in an effort to obtain funds for Saudi Arabia’s grand megaprojects.

According to the news outlet, Bloomberg, which cited a source with knowledge of the matter, Saudi Aramco this week restarted the selling of dollar-debt bonds, with the securities having 10, 30 and 40-year maturities.

Aramco is reportedly seeking to raise at least $3 billion from the move, with it potentially increasing the amount depending on investor demand. Having sold its first dollar bond in 2019, followed by a 50-year debt in 2020, it marks the first time the company is selling bonds since 2021.

The move comes amid the vast amounts of debt being borrowed by the Saudi government and companies affiliated with it this year, taking China’s place as the largest issuer of international debt in emerging markets.

Although the company and Saudi Arabia itself have not elaborated upon the reason for the decision to sell the bonds, reports state that it is part of Riyadh’s strategy to raise urgent funds required over the past year, particularly as the Kingdom struggles to bankroll its major megaprojects that are a key part of its ambitious economic diversification plan – Vision 2030.

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