Aramco obtained credit ratings of A1 by Moody's and A+ by Fitch ahead of the planned bond. "International bond issuance by Aramco would be a landmark event", M.R. Raghu, research head at the Kuwait Financial Centre, said. It still plans to launch an initial public stock offering or IPO in 2021, expected to generate $100 billion, having postponed its flotation from 2018.
Despite Aramco's havoc-scale earnings that simply wiped out the top earner Apple Inc. of the slate, the state-controlled energy company was rated as par with Saudi Arabia, pointing that the OPEC (Organizations of Petroleum Exporting Countries) Kingpin's sluggish economical growth would be weighing on Aramco's borrowing cost, while it had been preparing for its worldwide bond market debut.
The group has 257 billion barrels of oil equivalent, representing more than 50 years of reserves based on current production levels, according to a company presentation.
Now, the company has released its numbers as it prepares for a $15B bond sale, which the company plans to use to finance nearly a $70B stake in Saudi Arabia's petrochemical company.
Aramco said the bond sale, which may be split into tranches with maturities ranging from three to 30 years, is not linked to the SABIC acquisition.
From 85% to 50 percent, Aramco's tax rate was reduced by the Saudi authorities in 2017 in anticipation of a listing of Aramco within an global market.
Bloomberg indicated that state influence on Aramco is strong "Saudi Aramco has an extremely strong liquidity position", Moody's said, with $48.8 billion in cash against $27 billion in reported debt. Aramco said earlier this week, it has established a Global Medium Term Note Programme and will conduct a series of fixed income investor meetings to potentially sell a bond to partly fund the Sabic acquisition. In comparison, worldwide oil companies such as Shell, Total and BP derive around 23 per cent of their Ebitda from downstream and chemicals business, said Fitch. By comparison, Apple booked a gain of roughly $60 billion in its last full year, Royal Dutch Shell had Exxon Mobil $21 billion and net earnings of $23 billion. Revenue from upstream operations stood at around $217 billion, while downstream revenue was $139 billion. They are joined by Citigroup (NYSE:), Goldman Sachs (NYSE:), HSBC and NCB Capital as bookrunners.