By Lorena Ruibal

Saudi Arabian Oil Co. on Wednesday launched its first U.S. dollar-denominated Islamic bond, which will be issued in three tranches, according to a bank involved in the deal.

The world's biggest oil company is offering notes maturing in three, five and 10 years. The Islamic bonds, or sukuk, comply with Islam's teachings, including its ban on interest.

The state-controlled firm is raising an unspecified amount of cash to help fund its commitment to pay out $75 billion in dividends annually, a pledge Aramco made to drum up support for its initial public offering in December 2019.

Initial price guidance for the three-year bond was set at 105 basis points over the 0.25% May 2024 Treasury note, for the five-year bond at 125 basis points over the 0.75% May 2026 Treasury and for the 10-year bond at 160 basis points above the 1.625% 2031 Treasury.

The final terms and size of the transaction are expected to be set on Wednesday.

There are 29 active and passive bookrunners on the transaction, according to a deal note.

Write to Lorena Ruibal at lorena.ruibal@wsj.com

(END) Dow Jones Newswires

06-09-21 0431ET