EIG-led investors in Aramco oil pipelines

According to bank records and an investor presentation released on Monday, a group of institutional investors who bought a share in Saudi Aramco’s oil pipeline network last year recruited Citi (C.N) and JPMorgan (JPM.N) to assist restructure a loan that underpinned the acquisition.

In June, a consortium led by EIG Global Energy Partners of the United States purchased 49 per cent of Saudi Aramco’s Aramco Oil Pipelines Company, with the remaining 51 per cent owned by Saudi Aramco. Aramco agreed to a 25-year lease and leaseback with the pipelines company as part of the contract.

As revealed in the filings, the banks will advise issuer EIG Pearl Holdings on the sale of dual-tranche U.S. dollar-denominated amortising notes, in which investors led by EIG own about 90% of the company and Abu Dhabi sovereign wealth fund Mubadala Investment Company owns the rest.

The bond sale will be used to partially repay the deal’s $10.8 billion term financing facility. According to sources, the loan will be refinanced in two or three bond issues, with the first bond issuance expected to be worth at least $4 billion.

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 Asset Management are among the investors, according to the investor presentation.

According to the documents, Citi and JPMorgan began making investor calls for the debt sale on Monday.

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