Moody’s and Fitch emphasized Saudi Aramco boasts a robust financial standing and its newly established $10 billion US Commercial Paper Program has strong ratings.
High Ratings
Moody’s awarded a Prime-1 short-term issuer rating to Aramco and stressed its Aa3 long-term issuer rating with a stable outlook. Therefore, such ratings mirror the energy giant’s ability to meet financial obligations, Arab News reported.
At the same time, Fitch Ratings assigned an F1+ short-term rating to Aramco, a testament to its strong intrinsic capacity for timely payments and financial resilience.
It is worth mentioning that Aramco has recently established a $10 billion US Commercial Paper Program to issue notes with maturities of up to 270 days.
Clearly, commercial paper is an unsecured, short-term debt instrument issued by corporations. It covers receivables or meet short-term financial obligations, for instance, funding new projects.
“Aramco has excellent liquidity. Its consolidated cash balance and operational cash flow are more than sufficient to meet the group’s debt maturities, investment commitments and dividends over the next 12 to 18 months,” Moody’s said.
At the end of September, the Saudi oil company owned $69 billion of cash and cash equivalents.
Crucially, the credit rating agency anticipated that Aramco may generate $180 billion in funds from operations through March 2026. This would be sufficient to cover $16 billion in debt maturities, $85 billion in capital spending, and $140 billion in dividends over the same period.
Fitch
Moreover, Fitch stated that Aramco’s financial profile is highly supported by its conservative financial policies, low production costs, as well as strong pre-dividend free cash flow.
“Its business profile is characterized by large-scale production, vast reserves, low production costs and expansion into downstream and petrochemicals,” Fitch Ratings said.
Related Topics:
Aramco Partners with Gulf Cryo to Test Lower-Carbon Hydrogen Technologies
Bawan’s Subsidiary Secures SAR 832M Aramco Deal
Moody’s Upgrades Saudi Arabia’s Credit Rating, Highlights Economic Progress
