Saudi Aramco has asked banks to extend by a year a $10 billion loan it raised last May, two sources familiar with the matter said, suggesting that rebounding crude prices are not pushing the oil giant to reduce debt for the time being, Reuters reported. The sources confirmed a report by Loan Pricing Corporation, a fixed-income news provider owned by Refinitiv. It is at the banks’ discretion whether to extend the loan, but lenders will likely agree in order to maintain a good relationship with Aramco in the hope of receiving future business, LPC said citing a banker.
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Saudi Arabia
International companies that want to participate in the Saudi government’s investment opportunities “will have to make a choice” and establish regional headquarters in the kingdom as of 2024 or they will not win government contracts, the Saudi finance minister told Reuters yesterday.
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Saudi Arabia sold a two-part dollar bond as countries in the Gulf Arab region raise cash buffers to weather low oil prices and the coronavirus pandemic, Bloomberg News reported. The world’s largest crude exporter priced $5 billion in bonds on Tuesday. The $2.75 billion 12-year notes were priced at 130 basis points over 10-year U.S. Treasuries, compared with guidance of 140 basis points and initial price talk of 165. The $2.25 billion 40-year security were priced at 3.45%, versus guidance in the 3.55% area and initial price talk of 3.75%.
Saudi Arabia is preparing to return to global capital markets with a bond sale aimed at raising about $5 billion to help cover financing needs heightened by last year’s slide in oil prices, Bloomberg News reported. The kingdom is close to hiring banks for a sale earmarked for as early as this month, the people said, declining to be identified because the matter is private. No final decision on the timing has been made and the country may still put off the sale should market conditions deteriorate, they said. The Finance Ministry in Riyadh didn’t immediately respond to requests for comment.
Saudi Arabia pledged additional, voluntary oil output cuts of one million barrels per day (bpd) in February and March as part of a deal under which most OPEC+ producers will hold production steady in the face of new coronavirus lockdowns, Reuters reported. Saudi is going beyond its promised cuts as part of the OPEC+ group of producers to support both its own economy and the oil market, Energy Minister Prince Abdulaziz bin Salman said on Tuesday. Benchmark Brent oil prices rose on the news, trading up almost 5% above $53 per barrel at 2023 GMT.
Qatar and Saudi Arabia and its allies are expected to sign a deal on Tuesday designed to end a protracted feud that has split the Middle East and hampered U.S. efforts to isolate Iran, senior Trump administration officials said on Monday, the Wall Street Journal reported. Under the deal, the U.S. officials said, Saudi Arabia, the United Arab Emirates, Bahrain and Egypt are expected to officially end a blockade of Qatar they began in June 2017 when the countries accused Qatar’s leaders of supporting terrorism and aligning itself with Iran.
Saudi Arabian state oil giant Aramco on Tuesday reported a 44.6% drop in third-quarter net profit as the coronavirus crisis continued to choke demand and weigh on crude prices, Reuters reported. Share prices of global oil companies have been hammered this year as investors fret over the impact of the pandemic on energy demand and the long-term shift away from fossil fuels. Oil prices have recovered only slightly since tumbling to their lowest in almost two decades in March, prompting Aramco and other majors such as Shell and BP Plc to slash capital expenditure this year and next.
Saudi Binladin Group plans to hire more advisers to accelerate one of the Middle East’s biggest corporate-debt revamps and tackle its estimated $15 billion debt pile, Bloomberg News reported. The kingdom’s top builder reached out to restructuring specialists across the Persian Gulf to assist with reorganizing the business, a spokesman for Jeddah-based SBG said in a text message. The consultants will assist Houlihan Lokey Inc., which was appointed in April to manage the group’s turnaround.
Saudi Arabia’s economy will shrink by 6.8% this year, the International Monetary Fund (IMF) said on Wednesday, a sharper decline than the 2.3% contraction estimated in April, as low oil prices and the coronavirus pandemic hit the kingdom hard, Reuters reported. In an update of its April World Economic Outlook forecast, the IMF said it now expects a deeper global recession in 2020 and a slower recovery in 2021, as the coronavirus crisis intensifies in many emerging and developing countries.
Saudi Binladin Group failed to pay thousands of employees as the construction giant reels under the impact of coronavirus and restructures about $15 billion of debt, Bloomberg News reported. The conglomerate missed some salary payments in April and May, according to people with knowledge of the matter. It’s not clear yet whether the company, which employs about 100,000 staff, will be able to pay those employees in June, the people said, asking not to be identified due to the sensitivity of the matter.