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Saudi 'Arabian Drilling Company' Raises $533 Million

Saudi 'Arabian Drilling Company' Raises $533 Million
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Saudi 'Arabian Drilling Company' Raises $533 Million

Saudi 'Arabian Drilling Company' Raises $533 Million

The Arabian Drilling Co., a Saudi-based drilling company, has successfully raised SAR2 billion ($533 million) from the local debt market.

The transaction attracted large demand from various investor groups.

The final order booked amounted to more than SAR5.5 billion, which allowed the company to increase the issuance size from its original plan of less than SAR1.6 billion to SAR2 billion.

The demand also allowed the Sukuk pricing to land at Saudi Interbank Offered Rate (Sibor) 1.6%, which was the minimum pricing range in a five-year period.

HSBC Saudi Arabia acted as lead coordinator of the transaction, whereas HSBC Saudi and Fransi Capital were the joint lead managers for the issuance.

Riyad Capital was appointed as the Sukuk holders’ agent and payment administrator.

“ADC has enjoyed a solid reputation in the oil industry for many years,” said Ali al-Ghamdi, managing director administration of Arabian Drilling Company.

“The Sukuk issuance was mainly designed to expand the awareness of ADC impressive operational and financial track record to the wider market,” he added.

Established in 1964, the Arabian Drilling Company is a joint stock company owned by Schlumberger and Taqa, which is 45% owned by PIF.

ADC is specialized in onshore and offshore drilling and owns a fleet of 45 active rigs.

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Saudi Arabia Begins Marketing International Bonds Following 2025 Borrowing Plan Announcement

Riyadh (Reuters)
Riyadh (Reuters)
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Saudi Arabia Begins Marketing International Bonds Following 2025 Borrowing Plan Announcement

Riyadh (Reuters)
Riyadh (Reuters)

Saudi Arabia has entered global debt markets with a planned sale of bonds in three tranches, aiming to use the proceeds to cover budget deficits and repay outstanding debt, according to IFR (International Financing Review).

The indicative pricing for the three-year bonds is set at 120 basis points above US Treasury bonds, while the six- and ten-year bonds are priced at 130 and 140 basis points above US Treasuries, respectively, as reported by Reuters.

The bonds, expected to be of benchmark size (typically at least $500 million), come a day after Saudi Arabia unveiled its 2025 borrowing plan. The Kingdom’s financing needs for the year are estimated at SAR 139 billion ($37 billion), with SAR 101 billion ($26.8 billion) allocated to cover the budget deficit and the remainder to service existing debt.

The National Debt Management Center (NDMC) announced that Finance Minister Mohammed Al-Jadaan had approved the 2025 borrowing plan following its endorsement by the NDMC Board. The plan highlights public debt developments for 2024, domestic debt market initiatives, and the 2025 financing roadmap, including the Kingdom’s issuance calendar for local sukuk denominated in Saudi Riyals.

The NDMC emphasized that Saudi Arabia aims to enhance sustainable access to debt markets and broaden its investor base. For 2025, the Kingdom will continue diversifying its domestic and international financing channels to meet funding needs efficiently. Plans include issuing sovereign debt instruments at fair prices under risk management frameworks and pursuing specialized financing opportunities to support economic growth, such as export credit agency-backed funding, infrastructure development financing, and exploring new markets and currencies.

Recently, Saudi Arabia secured a $2.5 billion Sharia-compliant revolving credit facility for three years from three regional and international financial institutions to address budgetary needs.

In 2024, Saudi Arabia issued $17 billion in dollar-denominated bonds, including $12 billion in January and $5 billion in sukuk in May. Rating agencies have recognized the Kingdom’s financial stability. In November, Moody’s upgraded Saudi Arabia’s rating to “AA3,” while Fitch assigned an “A+” rating, both with stable outlooks. S&P Global rated the Kingdom at “A/A-1” with a positive outlook, reflecting its low credit risk and strong capacity to meet financial obligations.

The International Monetary Fund (IMF) estimated Saudi Arabia’s public debt-to-GDP ratio at 26.2% for 2024, describing it as low and sustainable. The IMF projects this ratio to reach 35% by 2029, with foreign borrowing playing a significant role in financing fiscal deficits.