Saudi Aramco starts issuance of Shariah-compliant US-dollar denominated trust certificates

Logo of Saudi Aramco

Saudi Arabian Oil Co. (Saudi Aramco) commenced the issuance of Shariah-compliant international trust certificates under its “Trust Certificate Issuance Program”.

The trust certificates will constitute Shariah-compliant, US dollar-denominated, direct, unsecured and limited recourse obligations, the company said in a bourse filing today, June 7, 2021.

The amount of the certificates will be subject to market conditions.

Saudi Aramco will use the net proceeds from each trust certificate issue for general corporate purposes or any other purpose specified in the final terms for a series of trust certificates.

In a separate statement, the company announced appointing Alinma Invest, Al Rajhi Capital, BNP Paribas, Citi, First Abu Dhabi Bank, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, NCB Capital, Riyad Capital, SMBC Nikko and Standard Chartered Bank as issuance managers. They will hold series of institutional investor meetings starting today until June 17, 2021.

The offering of the trust certificates will be limited to qualified investors in the jurisdictions in which the offering will be made in accordance with the rules and regulations of such jurisdictions.

The terms of redemption include dissolution on maturity (scheduled dissolution date); redemption following a dissolution event; early dissolution upon a tax event (at the option of Aramco); clean-up dissolution right (at the option of Aramco); dissolution upon a total loss event; tangibility event put right (at the option of certificate holders); optional dissolution right (at the option of Saudi Aramco), certificate holder put right (at the option of certificate holders), change of control put right (at the option of certificate holders), to be determined subject to market conditions.

The trust certificates will be issued under the Rule 144A/Reg S offering requirements under the US Securities Act of 1933, as amended. The stabilization rules of the Financial Conduct Authority (FCA) and the International Capital Market Association (ICMA) will apply to the issuance.

An application will be made for the trust certificates to be admitted to the official list of the FCA and the London Stock Exchange (LSE), along with the certificates to be listed for trading on LSE's main market.