DUBAI, Nov 17 (Reuters) - Saudi Aramco was set to
raise $8 billion from a five-part bond deal on Tuesday as the
world's largest oil producer seeks cash after low oil prices
dented its finances.
It received $48.1 billion in orders for the debt sale, less
than half what it drew for its debut bond sale last year, when
it raised $12 billion, a document issued by one of the banks
leading the deal showed.
The move is part of an onslaught on international debt
markets by Gulf issuers seeking to plug finances hit by the
pandemic and weak oil prices, which has pushed regional issuance
past last year's record to surpass $100 billion.
Aramco, which reported a 44.6% slump in third-quarter
profit, needs the money to pay dividends of $37.5 billion for
the second half of 2020 and fund its $69.1 billion purchase of
70% of Saudi Basic Industries (SABIC).
It also raised a loan of $10 billion this year, to be paid
in instalments until 2028, to back that acquisition.
Aramco sold $500 million in three-year bonds at 110 basis
points over U.S. Treasuries (UST), $1 billion in five-year bonds
at 125 bps over UST, $2 billion in 10-year notes at 145 bps over
UST, $2.25 billion in 30-year bonds at 3.3% and $2.25 billion in
a 50-year tranche at 3.55%, the document showed.
"I think the shorter-end is offering a bit more value than
the longer-dated bonds to where the existing bonds are trading,"
said Max Wolman, senior portfolio manager at Aberdeen Asset
Aramco tightened the spreads on the tranches with maturities
of three, five and 10 years by 30 bps from where it began
marketing them earlier on Tuesday. The spreads on the 30- and
50-year tranches were tightened by around 40 bps.
Last year, Aramco priced its debut bonds inside the Saudi
government's debt curve, but this bond sale was wider.
The 50-year tranche is the longest-dated international debt
issued by Saudi Arabia. In April, it issued a 40-year bond
tranche - at the time the longest-dated dollar issuance by a
Gulf borrower, only to be overtaken by a 50-year tranche by Abu
Dhabi in August.
Citi, Goldman Sachs, HSBC, JPMorgan
, Morgan Stanley, NCB Capital were hired
as active book runners.
Other banks involved in the deal include BNP Paribas
, BOC International, BofA Securities
, Credit Agricole, First Abu Dhabi Bank
, Mizuho, MUFG, SMBC Nikko
and Societe Generale.
(Reporting by Yousef Saba; Editing by Tom Hogue and Dan