Saudi Aramco has raised $3bn through its first international sukuk sale since 2021, with the offering more than seven times oversubscribed, according to sources familiar with the matter, Al Eqtisadiah reported.

The state oil giant offered two tranches of Islamic bonds, with tenors of 5 and 10 years. The company received orders exceeding $22bn for the sukuk, demonstrating strong investor appetite.

The yield on both tranches was tightened by 35 basis points from the initial price guidance during the sale process. The shorter-dated sukuk was priced at 85 basis points over US Treasuries, while the longer-dated tranche came in at 100 basis points over the benchmark.

This marks Aramco's second dollar-denominated debt issuance in the past two months, following a $6bn bond sale in July that included a 40-year tranche.

For this sukuk offering, Aramco appointed several banks as joint lead managers, including Al Rajhi Capital, Citigroup, Dubai Islamic Bank, First Abu Dhabi Bank, Goldman Sachs, HSBC, JPMorgan Chase & Co, KFH Capital and Standard Chartered, among others from Gulf Cooperation Council and Islamic countries.

The sukuk issuance comes amid a rise in Islamic bond offerings this year. Moody's Ratings expects global sukuk issuance to reach between $200bn and $210bn in 2024, surpassing 2023 levels, driven partly by deal flow from Saudi Arabia.

This sukuk sale aligns with Saudi Arabia's efforts to diversify its economy and raise funds for various initiatives under its Vision 2030 plan.