Anthropocene Fixed Income Institute

 This  note analyses private transactions to fund integrated O&G assets using public bond market financing for leverage. As some of the bonds  have landed in ESG indices and Article 8 funds, we recommend a further  analysis of stand-alone ESG ratings on the bonds, and point toward  reporting requirements under the EU regulatory regime for the financing  SPVs.

(3 April 2023)

A  private consortium led by BlackRock is looking to the bond market to  refinance/leverage their investment in Aramco's pipeline subsidiary.  This note makes the argument that the resultant bonds, if they come,  should align with the parent company in terms of ESG metrics.

(6 Feb 2023)

 A bond pipeline is building following the large EIG/BlackRock  oil/gas Aramco pipeline network transactions announced in 2021. The  first bonds out of the door, from Luxembourgian SPV EIG Pearl, are  illustrative for what can be expected. 

(5 Feb 2022)

 The new EIGPRL USD benchmark bonds have been snapped up by ESG  investors as they are included in the JPMorgan ESG CEMBI index. We opine  that this is an error with regards to investor expectations on the  index as EIGPRL effectively is Aramco exposure. This could lead to  divestment flows once ESG ratings are produced. 

(15 Feb 2022)

Aramco's lease-lease-back transactions of oil  and gas pipeline networks were worth USD27bn in 2021. These  public-to-private transactions require bridge financing, and AFII argues  that the bridge loans providers 'own' the carbon footprint until the  loans are refinanced with implication for YE21 investor exposures.

(16 Dec 2021)