EIG-led buyers in Aramco oil pipelines rent banks for dual-tranche bonds By Reuters

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© Reuters. FILE PHOTO: General view of Aramco tanks and oil lines in the Ras Tanura oil refinery and oil terminal of Saudi Aramco in Saudi Arabia, May 21, 2018. REUTERS / Ahmed Jadallah

By Yousef Saba

DUBAI (Reuters) – A group of institutional investors that got involved over the past year Saudi Aramco (SE 🙂 ‘s oil pipeline network has hired Citi and JPMorgan (NYSE 🙂 to help refinance a loan that backed the deal, bank documents and an investor presentation showed on Monday.

In June, a consortium led by the US-based EIG Global Energy Partners bought 49% of the Aramco Oil Pipelines Company founded by Saudi Aramco, which holds the remaining 51% of the shares. As part of the transaction, Aramco has entered into a 25-year lease and lease-back agreement with the Pipelines Group.

The banks will advise the issuer EIG Pearl Holdings – in which the investors led by EIG have a stake of almost 90% and the sovereign wealth fund Mubadala Investment Company of Abu Dhabi – on the sale of US dollar-denominated amortization bonds with two tranches, which Documents showed.

The bond offering will partially refinance the $ 10.8 billion term loan facility that supported the deal. Sources said the loan would be refinanced through two or three bond transactions, with the first bond issue likely to be at least $ 4 billion.

Investors in the stake include China’s state-owned Silk Road Fund, Saudi Arabia’s Hassana, the investment arm of the Kingdom’s largest pension fund, and Korea’s Samsung (KS 🙂 Asset Management, as the investor presentation showed.

Citi and JPMorgan launched investor calls to sell debt on Monday, the documents showed.

The offer comprises a tranche with a final term between 14-1 / 2 and 15 years and a weighted average term of 10.2 to 10.7 years as well as a tranche with a final term between 24-1 / 2 and 25 years with a weighted average Lifespan between 23-1 / 2 and 24 years, according to the bank records.

A group of 18 US, European, Asian and Middle Eastern banks are also involved in the transaction, including First Abu Dhabi Bank, HSBC and Mizuho.

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