Aramco gets unprecedented $100 billion demand for bond deal
After being shunned by Wall Street and international investors last year, Saudi Arabia made a roaring comeback on Tuesday as oil giant Aramco received more than $100 billion in orders for its maiden global bond.
The order book is set to be the largest ever seen in emerging markets, covering many times the $10 billion to $15 billion Aramco is expected to raise. It’s a sign of investors’ hunger for yield in a world where bonds from some developed nations have negative interest rates.
"This deal should do extremely well," said Anthony Simond, a fund manager at Aberdeen Asset Management In London. "The company appeals to more than one type of investor. Firstly, emerging market debt funds and secondly global investment grade investors."
The bond sale is largely seen as Plan B to raise money for the kingdom’s economic agenda after the initial public offering of Aramco was postponed until at least 2021 from an initial 2018 target. In effect, Saudi Crown Prince Mohammed bin Salman, who runs the country day-to-day, is using the state oil producer’s pristine balance sheet to finance his ambitions.