Riyadh — Saudi Aramco, the world’s largest oil producer, has begun marketing a two-tranche U.S. dollar Islamic bond (sukuk) with maturities of five and ten years, according to a term sheet reviewed by Reuters. The pricing of the sukuk is expected later today.
The state-controlled energy giant is seeking to raise between $3 billion and $4 billion, as it looks to strengthen its balance sheet in the face of weaker oil prices. Initial pricing guidance sets the five-year tranche at 105 basis points over U.S. Treasuries, while the ten-year portion is indicated at 115 basis points, sources familiar with the matter said.
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This issuance comes as Gulf markets experience a surge in debt sales. Earlier this month, Saudi Arabia itself raised $5.5 billion through a sukuk, reflecting strong investor appetite and rising inflows into global bond funds.
Geopolitical Risks Loom Over Investor Sentiment
While demand for Gulf bonds remains high, the timing of Aramco’s deal also places it under the shadow of escalating regional tensions. Reports emerged that Israel targeted Hamas leaders in Qatar through an airstrike, intensifying security concerns across the Middle East. Such developments may weigh on global investors’ risk appetite for regional issuances.
Lead Managers on the Deal
The sukuk is being arranged by a syndicate of major global and regional financial institutions, including:
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Al Rajhi Capital Company
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Citi
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First Abu Dhabi Bank
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Goldman Sachs International
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HSBC
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JPMorgan
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KFH Capital
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Standard Chartered Bank
These banks have been appointed as joint active bookrunners for the transaction.
Saudi Aramco has yet to issue an official comment on the offering.
