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BlackRock consortium taps sukuk market for Aramco deal
GreenSaif acquires 49% stake in Saudi oil giant’s gas pipeline unit
Michael Marray 1 Mar 2023

The BlackRock-led consortium, which acquired a 49% stake in Aramco Gas Pipelines Company, has refinanced part of its acquisition bridge loan in the sukuk market.

Law firm Milbank advised the managers on the US$1.5 billion project sukuk issuance by TMS Issuer, as part of a total US$4.5 billion issuance, together with GreenSaif Pipelines BidCo, for the refinancing of the bridge facility which supported GreenSaif’s acquisition of the stake in Aramco Gas Pipelines.

The managers included BNP Paribas, HSBC and J.P. Morgan as global coordinators and joint bookrunners.

Milbank advised on the structuring and implementation of the project sukuk structure, which uses a proportion of GreenSaif’s shares in Aramco Gas Pipelines as the underlying asset in a wakala-murabaha structure.

The sukuk and global medium-term note (GMTN) programme, which includes a Taipei Exchange-listed Formosa series, uses the international Islamic finance markets, especially in the Middle East, and the international bond markets for the financing of equity participation in vital energy infrastructure that is traditionally financed in local or international banking markets.

GreenSaif, owned by a BlackRock-led consortium of financial investors, has rights to 20 years of tariff payments for natural gas transported through Saudi Aramco’s domestic natural gas pipeline network.

“We continue to see very significant activity in the infrastructure-linked bond market and sukuk markets and we certainly anticipate that there will continue to be very large bond and sukuk offerings in the future, many in the Middle East and many used to refinance acquisition debt initially raised in the bank market," says Apostolos Gkoutzinis, partner in Milbank’s European leveraged finance and capital markets team.

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