Save for later Print Download Share LinkedIn Twitter SAUDI ARABIA -- State-owned Saudi Aramco is returning to the debt market with an Islamic bond -- or sukuk -- that is expected to raise around $5 billion. The extra funds will help Aramco meet its steep dividend obligations to the Saudi state, while the oil giant is also committed to spending more to expand upstream capacity. “The funds raised will mainly be used to pay the state dividends,” one banking source told Energy Intelligence. Despite last year's low crude prices and a fall in oil demand due to the pandemic, Aramco still dished out $75 billion in dividends and is committed to deliver a similar amount this year. A banker familiar with the matter said the US-dollar denominated sukuk would be worth around $5 billion, to be issued in three-, five- and 10-year tranches. Moody's Investors Service assigned a (P) A1 rating to the new sukuk program, noting Aramco's large operations, low production costs and strong financial position. In addition to the dividend, Aramco must also finance the expansion of Saudi oil production capacity to 13 million b/d from 12 million b/d (PIW Mar.26'21).