(Updates with launch, size, final demand, spreads)
By Yousef Saba and Scott Murdoch
DUBAI, June 9 (Reuters) - Saudi Arabian oil giant Aramco
locked in another $6 billion on Wednesday to help fund
a large dividend as it returned to the international debt
markets with its first U.S. dollar-denominated sukuk sale, a
document showed.
The debt issuance, which will help fund a $75 billion
dividend commitment that will mostly go to the government,
comprises tranches of three, five and 10 years, a document from
one of the banks arranging the deal and seen by Reuters showed.
Aramco sold $1 billion in the three-year tranche at 65 basis
points (bps) over U.S. Treasuries (UST), $2 billion in the
five-year portion at 85 bps over UST and $3 billion in 10-year
paper at 120 bps over UST.
Initial price guidance was around 105 bps over UST for the
three-year bonds, around 125 bps over UST for the five-year
notes and around 160 bps over UST for the 10-year tranche.
The spreads were tightened after the deal attracted combined
orders of more than $60 billion.
Aramco last year maintained its promised $75 billion annual
dividend to shareholders despite lower oil prices, and is
expected to shoulder significant domestic investments in Saudi
Arabia's plans to transform the economy.
Fitch assigned Aramco's sukuk issuance programme an A1
rating with a negative outlook, in line with the negative
outlook on existing Aramco ratings and tracking a change in
Saudi Arabia's sovereign outlook to negative in May last year.
"The company has displayed a strong commitment to pay $75
billion in annual dividends, which in Moody's view is not
sustainable should oil prices fall and remain significantly
below $60/bbl," Fitch said.
"Interlinkages between Saudi Arabia and the company imply
that any change in rating outlook on the government of Saudi
Arabia would be mirrored on Saudi Aramco's rating outlook."
The company chose to issue Islamic bonds over conventional
ones due to high demand for the instrument as a result of the
low number of dollar sukuk sales in the Gulf this year, a source
told Reuters on Monday.
Aramco has been widely expected to become a regular bond
issuer after its debut $12 billion issuance in 2019 was followed
by an $8 billion, five-part transaction in November last year,
also used to fund its dividend.
A source had told Reuters that Aramco was expected to raise
up to $5 billion with the deal, which had 29 active and passive
bookrunners working on it.
Active bookrunners on the deal included Citi, HSBC
, JPMorgan, NCB Capital and Standard
Chartered Bank. Passive bookrunners included BOC
International and Dubai Islamic Bank.
(Reporting by Yousef Saba in Dubai and Scott Murdoch in Hong
Kong; Editing by Edwina Gibbs, Jan Harvey and Elaine Hardcastle)
Standard Chartered (STAN)
HSBC Holdings (HSBA)
