It is scheduled to refinance the "Aramco Oil Pipes" bonds through 2 or 3 deals (Getty)resort Saudi Arabia AndUAE increasingly to debt marketsOn Wednesday, Abu Dhabi launched a two-tranche issue with a total value of about $3 billion, and Aramco Oil Pipelines issued $4 billion in bonds.
A document reported by “Reuters” showed that Abu Dhabi launched, on Wednesday, 10-year bonds worth 1.75 billion dollars at 63 basis points above the US Treasury, and 30-year bonds worth 1.25 billion dollars at 3%,
The document showed that Abu Dhabi reduced the benchmark price for US dollar-denominated bonds in two tranches after receiving orders of more than $ 9.75 billion in its second international bond sale this year.
The emirate set a final indicative price at 65 basis points, two basis points more or less above US Treasury bonds for the ten-year tranche, and at between 3% and 3.05% for the thirty-year bonds, according to the document issued by one of the banks participating in the deal.
The benchmark rate for the two tranches has shrunk from an initial benchmark of about 90 basis points over 1-year US Treasuries and about 130 basis points for 30-year bonds.
Aramco Oil Pipelines
In parallel, two sources familiar with the matter told Reuters that a consortium led by EIG Global Energy Partners, which bought a stake in Aramco Oil Pipelines Company, is preparing to issue bonds worth at least $4 billion to refinance a loan that financed a large part. From the deal, which amounted to 12.4 billion dollars.
The deal gave the consortium control of a 49% stake in the newly created company, with rights to fee payments for a period of 25 years for crude oil shipped through the Saudi company’s network.
The deal, which includes existing and future pipelines, is backed by $10.5 billion in seed funding from a large group of banks including Citi, HSBC and JPMorgan.
The two sources added that the bonds will be refinanced through two or three deals. Investors are likely to present to the fourth quarter the timetable for the bond issuance, and one of the sources said it is likely to be next month.
The two sources said that the consortium is expected to raise at least 4 billion in the first deal, and one added that it could raise up to 5 billion, and the second said it could rise to more than half the value of the loan.
Sources told Reuters in April that the first bond issuance would likely be in the first quarter of next year.
EIG is a Washington, DC-based investment firm with more than $34 billion in investments in global energy and energy infrastructure projects. EIG and Mubadala Investment Company, the Abu Dhabi government fund that joined with the first in the consortium, declined to comment.
The Aramco pipeline deal is very similar to the infrastructure deals signed over the past two years by the Abu Dhabi National Oil Company (ADNOC), which raised billions of dollars in sales and leaseback deals for oil and gas pipeline assets.
A consortium that acquired a stake in ADNOC’s gas pipelines similarly refinanced $8 billion in bank debt in bonds through two deals in October and February 2021.
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