Page 14 - DMEA Week 06 2023

DMEA NEWS IN BRIEF DMEA

out of our control. PIPELINES years and a weighted average life (WAL) of
“And, of course, the market forces will roughly 7-1/2 years, a conventional tranche
determine some of these issues. But I believe BlackRock-led investors in will have a tenor of about 15 years and a WAL
that we are going to see substantial and of around 12.3 years, and Formosa dual-listed
relative ease compared to today in the next Aramco pipes to get $4.5bn paper will mature in around 19 years with a
one week.” WAL of roughly 17.8 years.
The NNPC head said the national oil in bond sale Demand topped $20 billion for the three
company’s remittances to the federation tranches, with an earlier update showing $16
account were withdrawn because they were BlackRock Inc-led investors in Saudi Aramco’s billion in orders skewed towards the sukuk.
used to offset mounting subsidy costs, instead gas pipeline network are set to raise $4.5 The sukuk launched at 200 basis points
of waiting for the finance ministry to issue billion from a sale of bonds to refinance a (bps) over seven-year U.S. Treasuries (UST),
cheques every month. multi-billion dollar loan that backed their the conventional at 245 bps over 10-year UST
He stated, “We have fiscal obligations stake purchase, a bank document showed on and the Formosa at 275 bps over 30-year UST.
because whatever you do, and ultimately Thursday. The tranches were tightened 40, 30 and 40 bps
whatever money NNPC makes is from the The investors, including Saudi-backed from initial guidance, respectively.
fiscal obligation, taxes, royalties and margin, Hassana Investment Co., had in 2021 taken The sukuk’s spread placed it about 120
all three as of today, because we have not a 49% stake in Aramco Gas Pipelines Co in a basis points above where Aramco bonds
diluted the ownership of this company, all $15.5 billion lease-and-leaseback agreement. maturing in October 2030 are now trading,
belong to the state today. They are now issuing amortising bonds according to Reuters calculations and
“So the only way you can do this is to and sukuk, or Islamic bonds, to begin Tradeweb data.
hold back so that we can use that to buy the refinancing the $13.4 billion bridge loan that Moody’s gave the issuers - GreenSaif
product and come and sell it to the market.” backed the deal. BlackRock had last year Pipelines Bidco S.a.r.l. for the bonds and
While apologising to Nigerians for the held investor meetings in London to drum TMS Issuer S.a.r.l. for the sukuk - an expected
hardship caused by the fuel scarcity, Kyari up interest in the planned bond sale, Reuters rating of A1. Fitch Ratings assigned them an
described the situation as unfortunate, and reported in September. expected rating of A.
insisted it was not meant to punish the The debt sale is expected to be the first of BNP Paribas, HSBC and JPMorgan are
citizens. several. Credit rating agency Moody’s said it global coordinators on the GreenSaif debt
“First of all, I apologise on behalf of all expected the issuer to raise around $11 billion sale. Other banks on the deal include Citi,
of us who are stakeholders in the oil and with bonds and sukuk. First Abu Dhabi Bank, MUFG and SMBC
gas industry,” he said. “But I will say this is A similar deal in 2021 saw Aramco agree Nikko. BlackRock Inc. and its affiliates
unfortunate. It’s a glitch. We are responding to to sell a 49% stake in its oil pipelines network indirectly own 78.7% of the issuer through “an
this glitch. We’ll resolve this and bring succour to a consortium led by U.S.-based EIG Global aggregator vehicle”, a separate bank document
and relief to Nigeria and there’s no doubt Energy Partners for $12.4 billion. showed. Hassana, the investment arm of
about it,” he stressed. The EIG-led investors in Aramco Oil Saudi Arabia’s General Organization of Social
According to Kyari, when the Dangote Pipelines Co sold bonds in January 2022 to Insurance, owns the remaining 21.3%.
refinery and other facilities begin operation, begin refinancing the $10.8 billion loan that REUTERS
the source of supply will be closer to the backed the deal. They raised $2.5 billion,
country, and many of the current challenges falling short of a self-set target of $3.5-4.4
would disappear. billion.
THIS DAY The sukuk will have a tenor of about 10

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