Dubai (CNN Business)International investors are falling over themselves to lend money to Saudi Arabia's hugely profitable state-owned oil company.
Saudi Aramco tapped international debt markets for the first time ever Tuesday, and demand for the bonds soared above $100 billion, according to a person familiar with the transaction.
The bond issue will raise at least $10 billion for Aramco, the world's most profitable company. A spokesman for Aramco declined to comment.
In such large transactions, where strong demand is expected, investors often inflate their orders to ensure they're allocated at least some of the securities.
Saudi Arabia was planning to sell some shares in Aramco last year to raise money for the kingdom's economic transformation, but the IPO stalled. A lack of transparency over the size of the country's energy reserves had caused skepticism about the potential sale and the value of Aramco.
Since then, Saudi Arabia's vast energy reserves have been independently audited and shown to total 268.5 billion barrels. That estimate is slightly higher than the 266.3 billion barrel figure previously published by the Saudi government.
Earlier this month, Aramco issued a prospectus for the bond offering that showed it made $111 billion in profit last year. It was the first time the oil giant had revealed such financial details.
The company has said it will use the proceeds from the bond sale for general purposes. Investors expect some of the money raised to fund its purchase of 70% of Saudi Basic Industries Corporation (Sabic), the state-owned petrochemical company.
"It's not a surprise that the most profitable company in the world... on a debut international bond sale is capturing tons of investors' interest," said Aarthi Chandrasekaran, portfolio manager at SHUAA Asset Management.
Investors appear to have set aside concerns over the government's involvement in Aramco's finances, she added.
Saudi officials had said that selling just 5% of Aramco in an IPO could generate $100 billion to fund Vision 2030, a blueprint of what the country's economy should look like over the next decade.
The country have been on an aggressive drive to attract international investment as it diversifies its economy away from oil. But relations with the West have chilled following the killing of journalist Jamal Khashoggi in a Saudi consulate last year.
