Demand for Saudi Aramco bonds was inflated, sources suggest
With almost $90bn in demand left on the table, the bonds were expected to shoot up in value on Wednesday, but their performance was tepid
Dubai/London — Saudi Aramco's debut $12bn bonds booked at best modest gains on Wednesday, their first trading day after about $100bn in orders, suggesting part of the record-breaking demand was inflated, three banking and investment sources said. Aramco chose to only issue $12bn of debt, as its focus was to obtain favourable pricing to set a benchmark for its future financing activities. With almost $90bn in demand left on the table, traders and fund managers expected the bonds to shoot up in value on Wednesday, but their performance was tepid. "The price was a bit inflated as there was a lot of excitement and even hubris around this issue and I would imagine that some of the buyers may have flipped it in the market today," said a London-based fund manager who looked at the deal but decided not to invest in it. One trader and a senior banker said that, after realising the deal would have been oversubscribed, investors boosted their orders to increase their chances of getting a piece...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.