Despite making a huge profit, the oil giant was rated by credit agencies at par with Saudi Arabia
A Saudi Aramco logo. Picture: CHRISTOPHER PIKE/BLOOMBERG
Despite the huge profit, the state-owned oil company was rated by credit agencies at par with Saudi Arabia, meaning the kingdom's sluggish economy will weigh on Aramco's cost of borrowing as it prepares its bond market debut. “Saudi Aramco’s rating is constrained by that of Saudi Arabia ,” Fitch said. “This reflects the influence the state exerts on the company through taxation and dividends, as well as regulating the level of production in line with its Opec commitments.”Credit ratings allow investors to compare and assess the credit quality of bond issuers and their debt securities, and are important in determining how much borrowers have to pay.
Aramco will start meeting international bond investors this week for the much-anticipated debt transaction, expected to attract hefty demand from global investors. Aramco intends to pay for the acquisition in tranches, with 50% at the closing of the transaction and the remainder over a two-year period, from internal cash generation and, potentially, other resources, the company said in its presentation.Aramco had earnings before interest, tax and depreciation of $224bn in 2018. By contrast Apple, which according to Forbes was the world's top company in terms of profits last year, had normalised core earnings, or ebitda, of $81.8bn.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Crude gives Saudi economy a leg up, but non-oil growth slowsKingdom’s economic recovery still heavily relies on output of mineral, data show
Read more »
Newsdeck: Saudi Orders Temporary Release of Three Women’s Rights ActivistsA Saudi criminal court ordered on Thursday the temporary release of three women’s rights activists charged with undermining state security, in a case that has drawn international scrutiny and overshadowed measures to expand social freedoms in the kingdom.
Read more »
Runaway Saudi sisters leave Hong Kong for new life 'free of violence and oppression' | IOL NewsTwo Saudi sisters fleeing their family in Saudi Arabia have secured emergency visas and departed Hong Kong to a new country, their lawyer said.
Read more »
Indiana Jones of the art world finds stolen PicassoThe 1938 masterpiece, Portrait of Dora Maar, had changed hands at least 10 times, but was finally stolen from Saudi Arabian billionaire
Read more »
Stolen Picasso unearthed by 'Indiana Jones of art'A Dutch art detective dubbed the 'Indiana Jones of the Art World' has struck again, finding a Picasso painting worth 25 million euros stolen from a Saudi sheikh's yacht on the French Riviera in 1999.
Read more »
Newsdeck: Apple Debuts Apple Arcade Gaming Subscription ServiceApple Inc. added gaming to its suite of new video, news, and credit card services, introducing the subscription program just days after Google unveiled a cloud-based gaming plan.
Read more »
Bank Zero puts its systems through its paces ahead of debutThe app-based smartphone bank has started its final round of testing before its commercial launch in the second half of 2019
Read more »
Disney's 'Dumbo' soars, sort of, to top ticket salesDisney's new live-action film 'Dumbo' took flight over the weekend but didn't quite make the expected altitude.
Read more »
'Apple is selling us air now' - Five hilarious reactions to the Apple cardApple's card got many on social media excited, even some felt like they were 'being sold air', and others hoping Apple could try a bit harder with the innovations. 📱
Read more »