Aramco Bond Offering Facing Credit Rating Uncertainty

Saudi Aramco is pushing for a top credit rating ahead of its first international bond sale, but Saudi Arabia’s sluggish economy may curb the state-owned oil firm’s ambitions.


West Texas Intermediate graph

Aramco intends to issue its first U.S. dollar-denominated bonds, expected to be at least $10 billion, in the second quarter to help finance the acquisition of a stake in SABIC, the world’s fourth-largest petrochemicals maker.

Chief Executive Amin Nasser said last week that Aramco was talking to credit rating agencies ahead of its debut on the international capital markets, which comes after it last year pulled what would have been the biggest ever stock flotation.

Credit ratings allow investors to compare and assess the credit quality of bond issuers and their debt securities and are important in determining how much borrowers have to pay.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza