Saudi Aramco mandates banks for inaugural dollar sukuk
DUBAI, June 7 (Reuters) - Saudi Aramco has hired a large group of banks to arrange its inaugural issuance of U.S. dollar-denominated sukuk, a document showed on Monday, as it seeks cash to fulfil large commitments to its major shareholder, the Saudi government.
The banks will arrange fixed income investor calls starting on Monday, the document from one of the banks showed. An issuance of sukuk in three-, five- and 10-year tranches will follow, subject to market conditions.
The active bookrunners on the deal are Alinma Invest 1150.SE , Al Rajhi Capital 1120.SE , BNP Paribas BNPP.PA , Citi C.N , First Abu Dhabi Bank FAB.AD , Goldman Sachs International GS.N , HSBC HSBA.L , JPMorgan JPM.N , Morgan Stanley MS.N , NCB Capital 1180.SE , Riyad Capital 1010.SE , SMBC Nikko 8316.T and Standard Chartered Bank STAN.L .
Aramco last year maintained a promised $75 billion dividend despite lower oil prices, and is expected to shoulder significant domestic investments that form part of Saudi Arabia's plans to transform the economy.
Saudi Aramco is seeking to raise up to $5 billion via the sukuk, a source with knowledge of the matter told Reuters last week.
It chose to issue Islamic bonds over conventional ones due to high demand for the instrument as a result of few dollar sukuk sales from the Gulf this year, the source said.
Aramco was widely expected to become a regular bond issuer after its debut $12 billion bond deal in 2019 was followed by an $8 billion, five-part transaction in November last year, also used to fund its dividend.
The sukuk will be used for general corporate purposes, the bond prospectus reviewed by Reuters showed, but analysts and sources have said it will be used, at least in part, to fund Aramco's dividend.
Passive bookrunners on the deal are ADCB ADCB.AD , Albilad Capital 1140.SE , AlJazira Capital 1020.SE , Alistithmar Capital, ANB Invest, BOC International 601696.SS , Credit Agricole CAGR.PA , Dubai Islamic Bank DISB.DU , Emirates NBD Capital ENBD.DU , GIB Capital, KFH Capital KFH.KW , MUFG 8306.T , Mizuho 8411.T , NBK Capital NBKK.KW , Saudi Fransi Capital 1050.SE and Societe Generale SOGN.PA .
Reporting by Hadeel Al Sayegh, Saeed Azhar and Yousef Saba; Editing by Christian Schmollinger and Jacqueline Wong
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.