DUBAI, Feb 7 (Reuters) – Ratings agencies have assigned ratings to the planned debt sale by investors in Saudi Aramco’s gas pipeline network, led by BlackRock Inc (BLK.N), seeking to refinance a loan of several billion dollars which guaranteed their participation purchase.
The refinancing will be through the issuance of redeemable bonds and sukuk, or Islamic bonds, the rating agencies said.
The consortium, which includes state-backed Hassana Investment Co., reached a $15.5 billion sale-leaseback deal with Aramco in late 2021, giving investors a 49% stake in Aramco Gas Pipelines Co.
Reuters reported in September that BlackRock had held investor meetings in London to drum up interest in the planned bond sale.
“The issuer is expected to issue sukuk and conventional bonds to refinance a $13.4 billion bridge facility used in connection with the issuer’s acquisition of a 49% stake in AssetCo,” Fitch said. Ratings Monday.
It assigned to the issuers, GreenSaif Pipelines Bidco Sarl for the bonds and TMS Issuer Sarl for the sukuk, an expected issuer default rating of A, the same expected ratings for the bonds and the sukuk.
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Moody’s Investors Service assigned them an A1 rating.
In a similar deal in 2021, Aramco agreed to a $12.4 billion deal to sell a 49% stake in its pipeline system to a consortium led by U.S. firm EIG Global Energy Partners.
EIG-led investors in Aramco Oil Pipelines Co sold bonds in January to begin refinancing the $10.8 billion loan that backed the deal.
They raised $2.5 billion, short of the target they had set of $3.5-4.4 billion in choppy markets.
“The name of the issuing entity ‘GreenSaif’ raises some questions in terms of linguistics,” Ulf Erlandsson, managing director of the Anthropocene Fixed Income Institute, said in a research note.
“The SPV (special purpose vehicle) is set up under the jurisdiction of the European Union, and the EU is increasingly questioning the use of inappropriate ESG-related nomenclature in the marketing of financial instruments.”
He said the carbon footprint of the bonds, which should not be labeled “green”, should be based on Aramco, which owns 51% of AssetCo, “as should determinations on index inclusions or exclusions”.
Reporting by Yousef Saba; Editing by Arun Koyyur
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