Saudi Aramco could sell $10bn bond to acquire stake in Sabic

Bloomberg

Saudi Aramco could tap the bond market for about $10 billion to help fund the acquisition of petrochemicals giant Saudi Basic Industries Corp, according to the country’s Energy Minister Khalid Al-Falih.
The kingdom will decide in the “next few weeks” about the size of the proposed bond, though the offering would not be “huge,” Al-Falih told reporters in Abu Dhabi. “It will be probably in about the 10 billion range.” Aramco plans to tap the market in the second quarter, selling its first international bond.
“I think $10 billion of issuance from Aramco will be just the start,” said Zehan Mohamed Salleh, fixed-income portfolio manager at First Abu Dhabi Bank PJSC. “We definitely expect them to return later in 2019.”
Aramco is in talks to buy 70 percent of Sabic from the Public Investment Fund, which could cost about $70 billion. Some had expected the potential bond to rank among the largest issued by a company if Aramco planned to finance a large chunk of the Sabic deal with it, though Al-Falih last week played down chatter in the market that Aramco would fund the entire deal with the bond offering.
Finance Minister Mohammed Al-Jadaan said in December the nation intends to sell about 120 billion riyals ($32 billion) of local and foreign-currency debt this year to help finance its deficit.
“We expect Saudi Inc to be one of the biggest issuers in the emerging market space this year,” Salleh said. “The Saudi sovereign curve has repriced considerably in 2018, so there may be good reasons that the market can absorb the supply.”

Saudi set for $11bn asset-sale blitz
Bloomberg

Saudi Arabia could be in for a busy year of asset sales if the kingdom sticks to its plans. The government hopes to generate about $11 billion by 2020 through its privatisation program that includes the sale of stakes in utilities, soccer clubs, flour mills and medical facilities. The sales are key to the country’s efforts to wean the economy off oil.
“With the current status of the initiatives and the progress the privatisation Supervisory Committees are making, we see these as attainable targets,” according to the National Center for Privatization and PPP, which is responsible for most of the privatisations expect certain deals like Aramco and the stock exchange. “Progress in most cases is going according to schedule.”