Aramco pipeline investors to refinance loans with bonds next year: Sources

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DUBAI: EIG Global Energy Partners will lead a yet-unnamed consortium to subject billions of {dollars} in bonds throughout two or three transactions to exchange financial institution debt backing an funding in Saudi Aramco‘s oil pipeline belongings, two sources mentioned.

The Washington, D.C.-based agency’s consortium will subject bonds to exchange $10.5 billion in so-called staple financing that was organized by Aramco for potential suitors to take the 49 per cent stake, the sources mentioned.

The $12.4 billion deal, introduced final Friday, provides the EIG-led group a stake in Aramco Oil Pipelines, which has the rights to 25 years of tariff funds for oil transported by means of Aramco’s oil pipeline community that traverses the world’s largest crude exporter.

The staple financing backing the deal had a five-year maturity and one-year extension possibility, the sources mentioned.

EIG will exchange the complete quantity with long-tenor bonds throughout two or three bond offers, they mentioned.

The first bond issuance will seemingly be within the first quarter of next yr and all the refinancing might be finished inside two years, the sources mentioned.

The fairness portion of the $12.4 billion deal was $1.9 billion and the remaining was the staple financing, one of many sources mentioned.

EIG is in talks to promote a part of the fairness portion to investors together with Abu Dhabi state fund Mubadala, Chinese investors, pension funds in Saudi Arabia and the UAE, in addition to a small piece to U.S. pension funds, the supply added.

Mubadala has mentioned it’s trying on the deal.

EIG is a Washington, D.C.-based funding agency that has invested greater than $34 billion in vitality and vitality infrastructure initiatives all over the world.

EIG has not commented past its assertion final week that mentioned the transaction is predicted to shut quickly, topic to customary closing circumstances, together with any required merger management and associated regulatory approvals.

Aramco didn’t instantly reply to a request for remark.

HSBC was EIG’s monetary adviser and Latham & Watkins was authorized adviser, the assertion mentioned.

EIG has invested in a fuel pipeline challenge with LNG producer Cheniere Energy, in oil and fuel producer Aethon Energy and final yr took a majority stake in Limetree Bay Ventures, an oil refinery and terminal within the Caribbean.

The Aramco pipeline deal intently mirrors infrastructure offers signed during the last two years by Abu Dhabi National Oil Co (ADNOC), which raised billions of {dollars} by means of sale-and- leaseback offers of its oil and fuel pipeline belongings.

A consortium that took a stake in ADNOC’s fuel pipelines equally refinanced financial institution debt with bonds throughout two transactions in October and February.

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