[ARAMCO]

Saudi Arabian Oil Company “ARAMCO” (A1/A+ s/s by Moody's/Fitch) hit the market today with US$6bn 144A/Reg S (Cat 2) 3-part sr notes (10y due 7/17/34, 30y due 7/17/54 and 40y due 7/17/64). MWC then 3mos par call on 10y, 6mos on the 30y and 6mos on the 40y. Listing: LSE. Governing Law: English Law. NetRoadshow Link: www.netroadshow.com/nrs/home/#!/?show=062af515. UOP: gcp. Global books open, Pricing as early as 7/10. Settle 7/17 (T+5).

VIA:
Actives: Citi (B&D on 10y)/GSI/HSBC (B&D on 40y)/JPM (B&D on 30y)/MS/SNB Capital joint active books.
Passives: ADCB/anb capital/BofA/BoC/NSF Capital/ENBD/FADB/GIB Capital/Miz/MUFG/Natixis/Riyad Capital/SMBC/StanChart joint passive books.

Announced overnight as benchmark (size chatter $5bn), final size came in at $6bn with all tranches pricing INSIDE THE GUIDANCE RANGE. Price progression as follows:

10yr – IPT 140a; GDNC 110-115; PXD $2bn 5.25% 7/17/34 99.340 5.336% T+105.
30yr – IPT 180a; GDNC 150-155 ; PXD $2bn 5.75% 7/17/54 97.463 5.932% T+145.
40yr – IPT 195a; GDNC 160-165; PXD $2bn 5.875% 7/17/64 97.639 6.032% T+155.

As for r/v, outstanding ARAMCO was quoted as follows:
- ARAMCO 3.500% due 04/16/29 T+93bp (G91; $93.10) - $3bn pxd APRL 2019
- ARAMCO 2.250% due 11/24/30 T+91bp (G91; $84.47) - $2bn pxd NOV 2020
- ARAMCO 4.250% due 04/16/39 T+126bp (G111; $87.16) - $3bn pxd APRL 2019
- ARAMCO 4.375% due 04/16/49 T+126bp ($82.14) - $3bn pxd APRL 2019
- ARAMCO 3.250% due 11/24/50 T+118bp ($67.22) - $2.25bn pxd NOV 2020
- ARAMCO 3.500% due 11/24/70 T+120bp ($64.57) - $2.25bn pxd NOV 2020

SA Global Sukuk Ltd (A1/A+)

- ARAMCO 2.694% due 06/17/31 T+84bp (G89; $85.99) - $3bn pxd JUN 2021

** 30yr – ‘50s T+118 ($67.22) - +17bp lo $ = T+135bp (10bp NIC); If you add 5bp for 50-55 you’re at T+140bp (5bp NIC). Market players did both, so we’ll go with a 135-140 range (mid T+137.5bp). At the T+145bp pricing level, CONCESSION IS 7.5BP.

**10yr – 30yr f/v T+137.5; minus 40bp 10s/30s (at IPT) = T+97.5bp. At the T+105bp pricing level, 10YR CONCESSION IS 7.5BP

** 40yr – 30yr f/v T+137.5; plus 15bp 30s/40s curve at IPT = 152.5bp. At the T+155bp pricing level, 40YR CONCESSION IS 2.5BP.

The issuer wanted to be viewed as a global energy company. Comps away below express that view. The sovereign KSA ‘54s were at T+143.

Chevron Corp (Aa2/AA-)

- CVX 2.236% due 05/11/30 T+52bp (G52; $87.33) - $1.5bn pxd MAY 2020

- CVX 3.078% due 05/11/50 T+79bp ($69.33) - $1bn pxd MAY 2020

- CVX 2.343% due 08/12/50 T+78bp ($58.85) - $750m pxd AUG 2020

Exxon Mobil Corp (Aa2/AA-)

- XOM 4.227% due 03/19/40 T+74bp (G86; $88.55) - $2bn pxd MAR 2020

- XOM 4.327% due 03/19/50 T+94bp ($84.93) - $2.75bn pxd MAR 2020

- XOM 3.452% due 04/15/51 T+87bp ($73.16) - $2.75bn pxd APRL 2020

BP Capital Markets America Inc (A1/A-/A+)

- BPLN 4.989% due 04/10/34 T+87bp (G87; $98.76) - $1bn pxd JAN 2024

- BPLN 3.001% due 03/17/52 T+95bp ($65.46) - $1.25bn pxd SEPT 2021

- BPLN 3.379% due 02/08/61 T+99bp ($67.15) - $2.05bn pxd FEB 2021

Shell International Finance BV (Aa2/A+/AA-u)

- RDSALN 4.125% due 05/11/35 T+77bp (G74; $92.33) - $1.5bn pxd MAY 2015

- RDSALN 3.250% due 04/06/50 T+95bp ($69.98) - $2bn pxd APRL 2020

- RDSALN 3.000% due 11/26/51 T+92bp ($65.87) - $1bn pxd NOV 2020

TotalEnergies Capital SA (A1/A+/AA-u)

- TTEFP 5.150% due 04/05/34 T+78bp (G79; $100.63) - $1.25bn pxd 04/02/24 +80

- TTEFP 2.986% due 06/29/41 T+84bp (G92; $73.29) - $800m pxd JUN 2020

- TTEFP 3.127% due 05/29/50 T+96bp ($68.13) - $2.5bn pxd MAY 2020

- TTEFP 5.488% due 04/05/54 T+98bp ($100.33) - $1.75bn pxd 04/02/24 +100

- TTEFP 5.638% due 04/05/64 T+111bp ($100.76) - $1.25bn pxd 04/02/24 +115

When we went out with CFR Final books earlier, we had the final and peak books at the same level. After a long afternoon, we got some final intel on drops after the deal launched inside the guidance range:

FINAL BOOK:

$2bn 10yr - $11.00bn (5.50x) – PEAK $11.00BN
$2bn 30yr - $11.00bn (5.50x) – PEAK $11.00BN
$2bn 40yr - $9.500bn (4.75x) – PEAK $9.500BN