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Saudi Aramco Raises $3 Billion with Debut Sukuk | ASHARQ AL-AWSAT English Archive 2005 -2017
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The Logo of Saudi Aramco is seen at the 20th Middle East Oil & Gas Show and Conference (MOES 2017) in Manama, Bahrain, March 7, 2017. REUTERS/Hamad I Mohammed/File Photo

Riyadh-The sukuk market is expected to witness prosperity in the current year in which the Saudi government has commenced its first steps in the debut sukuk while Saudi Aramco is raising around $3 billion from its first issuance of sukuk.

Relevant banks were assigned to arrange the first issuance in coincidence with Moody’s granting the Saudi program an A1 classification based on a stable future vision.

Reuters revealed that the government appointed JPMorgan, HSBC and Citigroup as international arrangers of the dollar-denominated international sukuks — this coincides with Saudi plans to borrow 10 to 15 billion American dollars from the international issuance of this year.

Saudi Aramco has raised SAR11.25 ($3 billion) from its debut Islamic bond, according to reliable sources who reported to Reuters. The Islamic bond, part of a program to raise SAR37.5 billion, is the oil giant’s first fundraising exercise aimed at diversifying revenues that have been hit by low global oil prices.

The floating rate local currency sukuk has a seven-year maturity and offers 25 basis points over the six-month Saudi Arabian Interbank Offered Rate (SAIBOR).

The economic sector views the international Saudi program to issue sukuks as a positive step that comes in perfect timing, given that it goes along with the changes and fulfills the need to fund investments in essential infrastructure – amidst forecasts that this program will fund the budget deficit fort 2017 ($52.8 billion).