DUBAI (Reuters) – A group of institutional investors that acquired a stake in Saudi Aramco’s oil pipeline network last year raised $2.5 billion from the sale of two-tranche bonds on Thursday, far less than they had hoped, a banking document showed.
Amid the turmoil in the debt markets, the final spreads were unchanged from the indicative prices, with the deal attracting orders of about five billion dollars, according to the document.
A separate banking document showed earlier that the group seeks, through “EIG Pearl Holdings”, to raise between 3.5 billion and 4.4 billion dollars.
“Investment deals are getting more and more difficult in light of market conditions,” said a banker away from the deal. “Even the Coca-Cola bond deal has run into difficulties,” he added, referring to Coca-Cola Easygic, the Turkish soft drink bottling company that sold $500 million in sustainability-related bonds on Thursday, according to IFR news service.
Global debt markets were shaken by the Federal Reserve’s sudden shift toward faster rate hikes and the withdrawal of stimulus. As a result, borrowing costs have risen and investors are more reluctant to lend to companies until they know how much interest rates can rise further this year.
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