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Demand for Saudi Aramco Bonds Sails passed the target



LONDON – When leaders from Saudi Aramco, the giant oil company in Saudi Arabia, turned prospective investors on the company's first international bond budget last week, they were shown the red carpet everywhere.

In central London, investors entered a room at the exclusive Corinthia Hotel to hear details of the deal. In New York, Jamie Dimon, CEO of JPMorgan Chase, made a rare appearance to speak up for bond sales.

All signs are that investors are eager for something Aramco they can get – despite concerns about how tightly its assets are linked to its owner, the government of Saudi Arabia and the crown prince Mohammed bin Salman.

Prince Mohammed's connection to the murder of a prominent journalist and dissident, Jamal Khashoggi, caused a storm among politicians and media members. But the demand for Aramco bonds has peaked at $ 60 billion, a person told the case that refused to be identified because he was not authorized to speak publicly on the deal – far exceeded the company's original goal of selling about $ 10 billion off debt. The company's bankers are expected to set the price of the bonds on Tuesday.

It has made the bond committee a hot ticket for investors.

"The more someone needs money, the more we will have to give it to them," said Reza Karim, an assistant fund manager for emerging market debt at Jupiter Asset Management, in an interview.

Some analysts said Aramco's history – It was founded by Standard Oil of California – and the reputation of a Western style in the highly conservative realm made it attractive to international investors.

Its enclaves in the eastern part of the country – where American geologists first discovered oil in the 1930s – Similar to American suburbs, with baseball diamonds, cinemas and themed restaurants, in these inhabited areas, women wear headgear and hold serious jobs in areas such as computer science and geology at the company. – The management, "Helima Croft, an analyst at RBC Capital Markets, said." They see it as a center of enlightenment and prosperity in Saudi Arabia. " 002] Still, there is a concern – both inside and outside the company – that the Sabic transaction, and any IPO, could overshadow further distortions of the crown prince and his co-workers. For much of the company's history, the royal family had largely left Aramco's business to a number of professional leaders. But the danger of royal intervention has risen, analysts say, because the Crown Prince and his father, King Salman, no longer govern the country by consensus that their predecessors did.

Although the kings have traditionally been cautious about destroying Saudi Arabia's profit machine, current Saudi leaders seem to be willing to think with Aramco, according to Jim Krane, a Persian yellow expert at Rice University's Baker Institute for Public Policy.

"I see this as a process of adapting Aramco and the kingdom to cope with an uncertain future for oil, rather than a political attack on the king's cash cow," he said.


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