When Saudi Aramco published its accounts for the first time in 2019, the sheer magnitude of the company became clear.

This huge state-owned oil giant has annual revenues of $355 billion and a net income of $110 billion, making it by far the biggest company in the world.

Those revenues dwarf the revenue of its nearest rival, Apple ($265 billion) and, just as amazingly, Saudi Aramco produces 20 per cent more crude oil every day than Exxon, Chevron, Shell, BP and Total combined.

Capital Markets Partner for the Americas Gary Kashar explains: “If you line up the barrels that Saudi Aramco produces every day head-to-head, they would reach from New York to Los Angeles.

“If you line up the barrels that Saudi Aramco produces every day head-to-head, they would reach from New York to Los Angeles.”

“The sheer size and importance of this company is hard to comprehend, particularly because few people would realize it is by far the largest company on the globe.”

Saudi Aramco’s scale is familiar to the Firm though – we’ve been working with this key client for over 60 years.

Global Relationship Partner Wendell Maddrey notes: “The complexity and geographic scope of our advice to Saudi Aramco has increased dramatically as Saudi Aramco has diversified from producing crude oil into a fully integrated global energy company.

“The Firm has advised Saudi Aramco on virtually all of its major projects over this period and it was especially gratifying to assist the company with this milestone transaction.”

The $12 billion bond offering$12 billion bond offering$12 billion bond offering, which took place in April, was Saudi Aramco’s first ever international capital markets offering.

EMEA Capital Markets Partner Stuart Matty says: “The response from potential investors was staggering and the demand was valued at more than $100 billion.

“What was particularly impressive was the pricing they achieved. As a general rule, a company will always have a country ceiling in terms of rating/pricing etc., as it is an accepted investment rule that a company is never considered a safer or better investment than the country it operates in.

“But Saudi Aramco bucked that trend, achieving pricing that was tighter than Saudi Arabia itself could raise, pricing ‘inside the sovereign curve’, which has only happened two or three times in history.”

Our work on the bond offering was carried out by a truly cross-border team and covered three main areas: disclosure, listing and documentation, and Saudi Arabian legal aspects of the transaction, which were handled by our team in Riyadh.

Our New York team led on the disclosure portion, which included prospectus drafting and a detailed documentary review.

Gary says: “This encompasses an overall description of the transaction and in-depth information on the company and the industry. It also details the risk factors and security being offered, financial statements, and thorough analysis – everything a potential investor needs to make an informed decision.”

One of the challenges of this part of the project, given Saudi Aramco’s size, was to decide the level of detail that was needed by potential investors when it came to disclosing what is material.

“When a client has revenues of $355 billion it becomes a lot harder to judge what information is material or significant. For example, a multi-billion dollar contract is hardly immaterial in most senses, but in the context of a company the size of Aramco, it may be. The sheer magnitude of the numbers was sometimes difficult for the deal teams, and inevitably investors, to get their heads around.”

Handling Saudi Aramco’s profile was also a challenge given the intense media interest in the offering.

Gary notes: “The process itself was incredibly secret given the fact that the company had not previously released financial information about itself (and overnight became known as the world’s most profitable company) and so we also had to take a very strict approach to confidentiality throughout the deal, watermarking each document so that, if it leaked, we would know where the leak came from.

“We also redacted disclosure documents to eliminate all sorts of information for non-core team members, so there was a process around the distribution of every document.”

The listing and documentation part of the project was led by our EMEA Capital Markets team in London.

Stuart says: “The listing and documentation element is essentially about setting up the way the debt will work – the terms and conditions of the bonds and the contractual relationships between the various parties, including the arranging banks.

“I think the biggest challenge was balancing the need for the banks and investors to see a robust covenant and warranty package for a first-time issuer and creating a best-in-class package for the company given its peerless status.

“In this case, Saudi Aramco was able to use its sheer stature and profitability to make the covenant and warranty package it agreed to extremely light.”

Choosing the venue for the listing was also carefully considered, with London the preferred choice given its status, notwithstanding the uncertainty around Brexit.

Stuart says: “The offering was hugely successful and the result is an extremely satisfied client. We already had a very strong, long-term relationship with Saudi Aramco, but this was an opportunity to showcase the expertise of the Capital Markets team and lays the foundations for us to work together in even more areas in the future.

“The bond offering marks a historic milestone event for Saudi Aramco and, looking forward, we hope to support them in achieving other milestones into the future.”

A total of nine offices and 93 fee earners logged time on the matter.

Gary says: “When you look at the knowledge we have of Saudi Aramco, the global scale and the cross-border nature of the work, this project was tailor made for us.

“This was a great example of us being able to deliver as One Firm.”