DUBAI: Saudi Basic Industries Corporation (SABIC), in which Saudi Aramco holds a majority stake, is raising $1 billion in the biggest corporate dollar bond offering from the Middle East this year.
SABIC is selling $500 million of 10-year notes at 155 basis points over the midswap rate, down from initial price talk of 190 basis points, according to a person familiar with the matter.
It also is offering $500 million of 30-year securities with a yield of 3 per cent, compared with initial talk of 3.375 per cent. The bonds have attracted more than $8 billion in orders.
SABIC is listing the debt in Dublin and Taipei. While the securities are being marketed globally, the company is tapping demand for longer maturity bonds in Taiwan.
Saudi diversification
Saudi Arabia is seeking to diversify its economy away from oil by building new industries, and expanding chemical output to sell higher-value hydrocarbon products is part of that strategy. Saudi Aramco, the world’s largest oil exporter, bought a 70 per cent stake in SABIC this year for $69 billion.
Moody’s Investors Service rates the SABIC bonds A1, the fifth-highest investment grade, with a negative outlook. S&P Global Ratings assigns the debt two steps lower at A-.
Citigroup Inc., BNP Paribas SA, HSBC Holdings Plc, Mizuho Securities Co., MUFG and SMBC Nikko Securities Inc. are arranging the deal.
SABIC lost $592 million in Q2 this year as the coronavirus pandemic roiled economies across the globe.