Aramco raises US$4 billion in first bond sale of year

Published Tue, Jan 27, 2026 · 08:15 AM

[DUBAI] Saudi Aramco priced a US$4 billion bond sale, its first note sale this year, as the world’s largest oil producer steps up borrowing to fund investment and dividends.

The government-owned oil producer sold four bonds maturing in three to 30 years, according to a source familiar with the matter. The longest portion of the deal will pay 1.3 percentage point above Treasuries, said the source, who asked not to be identified because they are not authorised to speak publicly. That’s roughly a quarter-point less than initial pricing discussions.

Overall, the sale attracted more than US$22 billion of bids at the peak, with final books over US$14 billion, the source said.

Aramco is a key contributor to Saudi state finances, with large dividend payments supplementing royalties linked to crude sales. As oil prices have dipped and Opec+ policy limited Saudi production, cash flows lagged payouts before a rebound in the third quarter. Aramco’s US$17 billion in debt sales over the last two years helped support payouts.

Saudi Arabia’s budget remains heavily dependent on oil revenue as the kingdom pursues an ambitious modernisation drive. Crude prices remain well below levels needed to balance the state budget, forcing the government to project spending shortfalls for the coming years.

Aramco has turned to debt to augment its cash flow and plans to invest more than US$50 billion this year in oil and natural gas production, while maintaining its high base dividend of US$21 billion. In November, the company reported a surprise jump in third-quarter profit as rising production outweighed lower crude prices. Earnings are set to slip for the full year, estimates compiled by Bloomberg show.

While Brent crude has risen this year amid geopolitical tensions, including US attacks on or threats of action against fellow Opec producers Venezuela and Iran, the global benchmark lost almost 20 per cent last year.

Brent was trading below US$66 a barrel on Monday (Jan 26), while Saudi Arabia needs levels above US$90 a barrel to balance its budget under current spending plans.

Aramco’s gearing, a measure of indebtedness, remains low relative to industry peers, and the company plans to gradually raise it, chief financial officer Ziad Al-Murshed said on conference calls this year. Aramco has also signalled that further debt sales are planned.

SEE ALSO

Lenders appointed as active joint bookrunners for the sale were Citigroup, Goldman Sachs Group, HSBC Holdings, JPMorgan Chase and Morgan Stanley. BLOOMBERG