DUBAI: Saudi Aramco pulled in more than US$31bil of orders for its US$6bil bond sale, its first dollar-debt offering in three years.

Bids peaked above US$11bil for both the oil giant’s 10 and 30-year notes, according to a person with knowledge of the matter. Aramco also sold 40-year bonds in the deal that priced Wednesday.

The strong demand - final order books topped US$23bil - allowed the company to cut spreads offered on each of the tranches by at least 35 basis points. The deal was its first dollar debt sale since a US$6bil offering in 2021.

An Aramco spokesperson didn’t comment on the size of the transaction and referred Bloomberg to a company statement earlier this week announcing that it planned to sell notes. The deal is extending the oil-rich kingdom’s debt spree as it looks to fund projects.

“Aramco is extending maturities as it will continue to gradually leverage up given their expansion plans and capital expenditure needs,” according to Apostolos Bantis, managing director of fixed-income advisory at Union Bancaire Privee Ubp SA.

Saudi Arabia’s government and affiliated companies have borrowed vast amounts this year, and as of June had topped China as the biggest issuer of international debt among emerging markets.

The state, which needs funds to help cover an expected budget shortfall resulting from an ambitious economic diversification plan, has accounted for more than half of the total debt sold by Saudi entities this year.

Aramco is a big part of the kingdom’s cash flow plans. In June, the Saudi government offloaded a stake in the company that eventually brought in US$12.35bil, while the company’s massive dividend payouts - the biggest in the world - also help fill state coffers.

 - Bloomberg