Saudi Aramco’s debut international bond topped US$100 billion on Tuesday.
After posting profits of US$111 billion last year, orders for Saudi Aramco’s debut international bond topped US$100 billion on Tuesday.
Bloomberg points out that the bond sale raises money to finance Saudi Arabia’s economic development after an initial public offering (IPO) was postponed last year until at least 2021.
Saudi Crown Prince Mohammed bin Salman is using the state oil producer’s pristine balance sheet to finance his ambitions for the economy following the international outcry surrounding the murder of Jamal Khashoggi.
Concerns about government influence
According to Al Jazeera, the record-breaking figure is a sign of market confidence in the oil giant which has faced investor concerns over government influence over the company.
Aramco is expected to raise more than US$12 billion from the deal, which is seen as an indicator of interest in its IPO.
Reports state that before the six-part bond deal was marketed on Monday, Saudi Energy Minister Khalid al-Falih said initial indications of interest for the paper were over US$30 billion.
US$1 trillion valuation
The demand is thought to be the largest ever for emerging markets bonds, surpassing order book value of more than US$52 billion for Qatar’s UD$12 billion deal last year, “US$67 billion for Saudi Arabia’s inaugural issue in 2016 and UD$69 billion orders for Argentina’s UD$16.5 billion trade that year.”
Economists are now predicting that the oil giant could be worth more than US$1 trillion.
Aramco’ s stock has improved over the past two years despite the controversy surrounding the kingdom. Experts fear its a sign that the actions of the barbaric Saudi regime has little impact on the global oil market and on those who trade on it.