Milbank Advises Initial Purchasers on $2.5B Offering of Project Bonds by EIG Pearl Holdings S.à r.l.

Milbank LLP has advised the underwriting banks on the $2.5 billion bond offering by EIG Pearl Holdings S.à r.l. (“EIG Pearl”) in connection with its acquisition of a minority stake in Aramco Oil Pipelines Company, a subsidiary of Saudi Arabian Oil Company (“Saudi Aramco”).

This innovative structure uses the international bond markets for the financing of equity participations in vital energy infrastructure that is traditionally financed in local or international banking markets.

An aggregator vehicle managed by EIG owns approximately 89% of EIG Pearl, while the remaining 11% is held by a wholly owned subsidiary of Mubadala Investment Company PJSC. EIG Pearl has acquired a 49% stake in Aramco Oil Pipelines Company and has rights to 25 years of tariff payments for oil transported through Saudi Aramco’s crude pipeline network.

The underwriting banks included Citigroup and J.P. Morgan as global coordinators and joint bookrunners, in addition to a syndicate of joint bookrunners, joint passive bookrunners and co-lead managers.

The Milbank team was led by European Leveraged Finance/Capital Markets partner Apostolos Gkoutzinis and included special counsel Joji Ozawa, associate Lefteris Dafermos and paralegal Salma Farran. The Milbank projects team was led by Global Project, Energy and Infrastructure Finance partner John Dewar and included special counsel Munib Hussain and associate Bader Thabti, as well as New York partner Dan Bartfeld. New York Tax partner Eschi Rahimi-Laridjani and associate Benjamin Heller advised on the tax aspects.

Mr. Gkoutzinis noted: “We are pleased to have advised the banks on this investment grade offering that will partly refinance the original financing that backed the acquisition of 49% of Aramco Oil Pipelines Company. It is great to see the bond markets involved in this type of financing solution.”

Mr. Bartfeld added: “We continue to see very significant activity in the infrastructure-linked bond market and we certainly anticipate that there will continue to be very large bond offerings in the future, many in the Middle East and many used to refinance acquisition debt initially raised in the bank market.”