Saudi Arabia continues to lead regional bond issuance. Initial price thoughts for Saudi Aramco’s US dollar-denominated five- and ten-year Reg S Islamic bonds were released on Wednesday morning.

The five-year sukuk is priced at Treasuries plus 105 basis points (bps) area, and the ten-year sukuk at 115 bps area.

The oil giant is rated Aa3 by Moody's (stable outlook) and A+ by Fitch (stable outlook). The ijara/murabaha structure is expected to be rated Aa3 by Moody’s and A+ by Fitch, in line with the issuer’s ratings.    

The sukuk will offer a fixed rate semi-annual profit rate and will be listed in the London Stock Exchange.

Al Rajhi Capital Company, Citi, Dubai Islamic Bank, First Abu Dhabi Bank, Goldman Sachs International, HSBC, J.P. Morgan, KFH Capital, and Standard Chartered Bank are the bookrunners.

First Abu Dhabi Bank, HSBC, and Standard Chartered Bank are the structuring agents

ICMA/FCA stabilisation applies

In May Aramco raised $5 billion by issuing a dollar-denominated 3-part bonds. While its five-year debt sale was priced at $1.5 billion with a spread set at 80 bps, the ten-year deal at $1.25 billion with a spread of 95 bps, and the 30-year note at $2.25 billion with a spread of 155 bps.