Saudi Aramco, the world’s leading oil producer, has raised $3 billion through the issuance of Islamic bonds, or sukuk, as confirmed by a term sheet published on Thursday. The successful offering took place against a backdrop of heightened regional tensions after Israel’s recent strike on Qatar—an event that did little to dampen investor interest.
The energy giant issued two tranches: $1.5 billion in five-year sukuk with a profit rate of 4.125%, and another $1.5 billion in 10-year sukuk yielding 4.625%. Strong investor appetite led Aramco to reduce pricing by 35 basis points from initial guidance, with final orders surpassing $16.85 billion.
Despite military escalation in the region following the attack on Qatar, investor confidence remained unshaken. The Gulf has seen a notable increase in bond issuances this month, including a recent $5.5 billion sukuk sale by Saudi Arabia, highlighting sustained demand and considerable capital flowing into bond funds.
Aramco plans to use the proceeds for general corporate needs amid a period of relatively low oil prices. In a related development, a group led by Global Infrastructure Partners (GIP), a BlackRock entity, recently entered an $11 billion lease and leaseback agreement for Aramco’s Jafurah gas facilities. The consortium is currently negotiating approximately $10 billion in debt to finalize the arrangement.
Key financial institutions acting as bookrunners for the sukuk offering include Al Rajhi Capital, Citi, Dubai Islamic Bank, First Abu Dhabi Bank, Goldman Sachs, HSBC, JPMorgan, KFH Capital, and Standard Chartered. The deal is viewed as a gauge of investor sentiment toward regional opportunities despite ongoing geopolitical uncertainties.
Although Aramco has not publicly commented on the transaction, the strong reception for its Islamic bonds underscores the company’s capacity to secure funding under complex conditions, reinforcing market trust in this global energy leader.