Banks Assist Saudis raise $12 billion in bonds

Saud Arabian state-controlled oil company Aramco – the most rewarding in the world – has raised $12 billion in a bond issue that shows investors are eager to do business despite outrage over the killing of a journalist of last year with all the kingdom.

Together with bids supposedly reaching as much as $100 billion, bonds out of Saudi Aramco began trading in London on Wednesday following strong attention from investors. The Saudis had initially wished to increase 10 billion but issued $12 billion at the end, according to financial information provider FactSet.

Saudi Arabia faced international condemnation following the assassination in October of Jamal Khashoggi. But the bond market, which was conducted by banks such as Morgan Stanley and JPMorgan, shows continued attention from Western businesses.

The money is intended to bring cash to the coffers of the kingdom. The bond’s profits will aid Aramco in its $69 billion acquisition of majority shares in the Saudi petrochemicals firm SABIC from the autonomous wealth finance of the country. As it broadens its own investments in an attempt to diversify away Saudi earnings from its dependence on fossil fuels, that money would be employed by the finance.

The bond issue represents a rare chance to get the huge profits it creates — and a item of Saudi Arabia’s state-dominated petroleum sector. In filings released before the bond problem, ratings agencies revealed that the company generated $111 billion in net income this past year.

By contrast, Apple booked a profit of roughly $60 billion in its last full year, Royal Dutch Shell had Exxon Mobil $21 billion and net earnings of $23 billion.

Was Kingdom Holding, the investment company chaired by Prince Alwaleed bin Talal, who was swept up at a effort in 2017 led by the crown prince since he consolidated power.

Kingdom Holding CEO Talal Al-Maiman reported the bond yields were a bit lower than that which the company aims for.

Al-Maiman stated that the large interest from the bond is a good indication for the kingdom.

“I feel this is a triumph for Saudi Arabia,” Al-Maiman stated. “It’s just a huge vote of confidence”


Aya Batrawy reported from Abu Dhabi.