Yahoo Finance One of world's largest oil company hires banks to raise cash amid COVID-19 hitting oil prices
Saudi Aramco (2222.SR) has revealed that it has hired a group of banks in a bid to raise cash amid a slump in oil price.
The oil giant, one of the largest companies in the world by revenue, has taken on Goldman Sachs (GS), Citi (C), HSBC (HSBC), JPMorgan (JPM), Morgan Stanley (MS) and NCB Capital to arrange investor calls starting on Monday ahead of a multi-tranche US dollar-denominated bond issuance, it said.
Other banks involved in the deal include BNP Paribas, BOC International, BofA Securities, Credit Agricole, First Abu Dhabi Bank, Mizuho, MUFG, SMBC Nikko and Societe Generale, a document issued by one of the banks showed.
A benchmark multi-tranche offering, subject to market conditions, consisting of three-, five-, 10-, 30- and/or 50-year tranches will follow.
It comes as ratings agency Fitch revised its outlook on the Saudi Arabia’s state oil company from stable to negative last week.
“This reflects the influence the state exerts on the company through strategic direction, taxation and dividends, as well as regulating the level of production in line with OPEC commitments,” Fitch said.
READ MORE: Oil prices fall as COVID-19 cases spike
Earlier this month, Aramco posted a 44.6% slump in third-quarter net profit compared to the year before as the coronavirus outbreak continued to weigh on oil prices.
The company, which is the world’s largest oil firm by production, has slashed its crude production since May on the back of a global supply cut pact with OPEC and its allies in an attempt to bolster demand.
Oil prices tumbled to their lowest level in almost two decades in March on the back of the health crisis.
In August, Brent (CL=F) and West Texas Intermediate prices, in contrast, reached their highest levels since the start of the pandemic after optimism following rising fuel demand and supply cuts.
However, the outlook has taken a hit over mounting pandemic-related demand fears, leading to the price dropping in recent weeks.
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