Oil Prices and News

Saudi energy minister expects Aramco bond demand at 'north of' $30 billion

Key Points
  • Saudi Energy Minister Khalid al Falih expects robust demand for state oil giant Saudi Aramco's first-ever bond issuance.
  • The first-ever debt issuance from the world's largest oil firm will enable greater visibility into its financial performance.
S&P Global Platts: Surprised at speed of Aramco bond sale
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S&P Global Platts: Surprised at speed of Aramco bond sale

Saudi Energy Minister Khalid al Falih expects robust demand for state oil giant Saudi Aramco's first-ever bond issuance, the deal for which is expected to close on Wednesday.

Demand for the bond should be "north of" $30 billion, al Falih said while speaking at the inaugural Gulf Intelligence Saudi Arabia Energy Forum in Riyadh on Monday.

Saudi Arabia's state-controlled energy giant Aramco plans to tap bond markets this week, marking the first-ever debt issuance from the world's largest oil firm and enabling greater visibility into its financial performance.

Initial media reports put the Aramco bond issuance amount at $10 billion, which sources have told CNBC is "reasonable as a minimum."

An Aramco oil tank is seen at the Production facility at Saudi Aramco's Shaybah oilfield in the Empty Quarter, Saudi Arabia.
Ahmed Jadallah | Reuters

The move is designed to help raise funds for a down payment on the oil giant's $69.1 billion purchase of a majority stake in Saudi petrochemicals firm Sabic.

Aramco, the world's top oil producer, earlier this month received an "A+" rating from Fitch and an "A1" rating from Moody's in its first ever credit ratings, following 2018 earnings that dwarfed those of international oil majors.

Saudi Arabia has already seen formidable success in its recent tapping of the bond market: It issued $7.5 billion in sovereign bonds in January which drew an impressive $27 billion in orders. Saudi Arabia has "A1" and "A+" ratings from agencies Moody's and Fitch, respectively, a sign of reliability and low risk for investors.

—Reuters contributed to this report.