Oil conglomerate Saudi Aramco has turned to bond markets and raised $3 billion from sukuk as investor demand remains undisturbed after Israeli strikes on Qatar, as per a Reuters report.
Islamic bonds are commonly called sukuk and are a Shariah-friendly financial instrument to help firms in the GCC region raise capital.
The update comes as reports by Bloomberg indicate that the oil company is open to raising more cash for its business ventures, with asset management company BlackRock looking to provide financing in an estimated $10 billion deal.
The financing is connected to an investor consortium led by Global Infrastructure Partners, which is owned by BlackRock, to help develop its Jafurah gas plant in a $11 billion lease and leaseback deal.
Saudi Aramco is not unfamiliar with the bond market
The oil company has been known to turn to bond markets to raise cash from time to time. In June, Aramco said via press release that it had successfully completed its $5 billion bond issuance across three tranches of senior notes maturing respectively in 2030, 2035, and 2055.
A term sheet shown to Reuters revealed that the total amount raised for both tranches was $16.85 billion. Aramco has priced its bonds into two categories: $1.5 billion worth of 5-year Islamic bonds at a profit rate of 4.125% and $1.5 billion worth of 10-year Islamic bonds at a profit rate of 4.625%.
Source: Google Finance