DETROIT, MI-JANUARY 16: The Aramco exhibit is show
(Bill Pugliano/Getty Images)

  • Saudi Aramco, the world's biggest oil company, will issue a multi-tranche international bond, according to a filing with the national stock exchange.
  • The company has hired Citi, Goldman Sachs International, HSBC, JP Morgan, Morgan Stanley and NCB Capital to underwrite the sale.
  • Aramco did not specify how large the dollar-denominated issuance would be, but it is expected to run into the billions, as the company struggles with a historic hit to oil demand. 
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Saudi Aramco, the world's largest oil company, plans to issue an international bond, as it works to shore up its finances in light of the collapse in demand for crude oil this year.

In a filing with the Riyadh stock exchange on Monday, Aramco said it would issue dollar-denominated bonds of varying maturities - 3-, 5-, 10-, 30- and possibly 50-years - but did not specify how large the sale would be. 

"The bonds will be senior, dollar denominated, unsecured by assets," Aramco said in a filing.

Citi, Goldman Sachs International, HSBC, JP Morgan, Morgan Stanley and NCB Capital have been appointed as underwriters for the sale, the filing showed. 

Aramco, which reported a near-45% drop in net profit in the third quarter just two weeks ago, has struggled to shore up its balance sheet this year, much like its rivals, as the Covid-19 pandemic has destroyed energy demand and kept crude prices below $40 a barrel for much of the past six months.

The company also committed to paying a dividend of $18.75 for the third quarter.

The company has repeatedly cut official selling prices to its big customers in Asia to try to maintain demand, even as air, sea and road transport in the region remain below pre-pandemic levels.

Ratings agency Fitch last week lowered its outlook on Saudi Aramco's debt to negative and maintained its "A" rating, in line with the same decision on November 10 on its sovereign rating for Saudi Arabia

Aramco made its then-record-breaking debut on the stock market last December. Its shares since then have fallen by 9% to around 35.30 riyals. But this is a far cry from the 31% drop so far this year in the price of crude oil. 

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