Saudi Arabia’s state-run oil behemoth is looking to raise $3 billion in its second international bond sale in two months، the latest deal in the kingdom’s debt spree this year.

Saudi Aramco has mandated banks for the dollar-denominated bonds، according to a statement on the Saudi stock exchange، without giving details on the amount it plans to raise. The expected $3 billion issuance will be split between five- and 10-year sukuk، as securities compliant with Islamic rules are known، according to a person familiar with the matter who asked not to be identified.

An ambitious economic diversification

The government and state-linked companies’ heavy borrowing comes as Crown Prince Mohammed Bin Salman pushes the country on an ambitious economic diversification. The effort is being complicated by oil’s decline، which at around $75 a barrel in London is below the nearly $100 the kingdom needs to balance spending. Weaker crude has also hit Aramco’s profit، even as the company has maintained its massive dividend payout that’s crucial for the government in helping narrow a budget deficit.

It maintained its $31 billion quarterly dividend to the Saudi government and other investors in the second quarter despite lower profit، and has said it will distribute $124 billion this year. Free cash flow — funds from operations minus capital expenditure — of about $19 billion in the quarter was less than the payout. To maintain the dividend at current levels، the company would likely need to take on more debt.

Aramco raised $6 billion in July، its first dollar debt sale in three years، and also sold 40-year bonds that month. In June، the Saudi government offloaded a stake in the company that eventually brought in $12.35 billion. 

Tapping bond markets

Among other state borrowers، the Public Investment Fund، Saudi Arabia’s sovereign investor، tapped bond markets to raise $2 billion earlier this month، taking its year-to-date issuance to about $10 billion. The PIF، chaired by the crown prince، is a top recipient of Aramco dividends and a key part of his plans to reshape the Saudi economy.

Neighboring petrostate the United Arab Emirates also tapped debt markets as its largest producer Abu Dhabi National Oil Co. this month sold $4 billion in five-، 10- and 30-year debt. The UAE، a partner in the Organization of Petroleum Exporting Countries، is investing billions of dollars to raise production capacity even as it chafes against the group’s production constraints.

Aramco appointed Al Rajhi Bank، Citigroup Inc.، JPMorgan Chase & Co. and Standard Chartered Plc، among others، as active joint book-runners for the sale، according to the statement.