SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

In one of the world’s largest energy infrastructure deals, Saudi Aramco is set to raise $12.4bn by leasing usage rights of its stabilized crude oil pipeline network to a consortium led by EIG Global Energy Partners (EIG) which is one of the world’s leading energy infrastructure investors. According to the deal, the pipeline business will be leased for a period of 25 year through a newly formed entity, Aramco Oil Pipelines Company and will help the oil major to optimize its portfolio optimization program. Aramco will hold a 51% stake in the new company while retaining full ownership and operational control of its stabilized crude oil pipeline network and EIG will hold 49%. According to the oil company, “The transaction represents a continuation of Aramco’s strategy to unlock the potential of its asset base and maximize value for its shareholders. It also reinforces Aramco’s role as a catalyst for attracting significant foreign investment into the Kingdom.”  Aramco had hired JPMorgan and MUFG to advise on “Project Seek” in October 2020 with an aim to sell a stake in its pipeline business in line with Abu Dhabi National Oil Company’s (ADNOC) sale of its natural gas pipeline to a group led by Brookfield and GIC in which it had raised ~$10bn. EIG beat BlackRock and Brookfield to secure the deal. Mubadala, Abu Dhabi’s sovereign wealth fund is also in talks with EIG to join the investor group.
Aramco’s bonds were flat on the secondary market. Its 3.25% 2050s were down 0.1 to trade at 92.625 while its 3.5% 2070s were up 0.04 to trade at 91.625 cents on the dollar.
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