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Case study: BlackRock-owned GreenSaif’s landmark project finance Sukuk

TMS Issuer Sarl, a vehicle owned by a Blackrock-led consortium, issued a landmark US$1.5 billion project Sukuk facility in February 2023 as part of a total US$4.5 billion issuance to refinance a bridge facility for GreenSaif Pipelines Bidco Sàrl (GreenSaif)’s acquisition of a minority stake in Saudi Arabian Oil Company (Saudi Aramco)’s subsidiary, Aramco Gas Pipelines Company (AssetCo).

The Sukuk issuance was significantly oversubscribed, with nearly US$16 billion in demand received, exceeding the expectations of Blackrock on its maiden Sukuk issuance, Munib Hussain, a partner at Milbank which advised the lead managers of the issuance, told ISFI.

The facility was managed by BNP Paribas, HSBC and JPMorgan as global coordinators and joint bookrunners.


In 2021, GreenSaif, a BlackRock-owned entity, entered into a bridge facility to acquire 49% of AssetCo and is now entitled to 20 years of tariff payments for natural gas transported through Saudi Aramco’s gas pipeline network. As part of the acquisition, GreenSaif utilized a US$14 billion bridge bank facility.

In February 2022, upon reaching financial close of the acquisition, Aramco signed an MoU with BlackRock to explore joint opportunities in future energy transition projects related to low-carbon energy infrastructure.

“This transaction is part of BlackRock’s commitment to boosting ESG standards and is in line with Saudi Arabia’s strategy to sell assets, the proceeds of which will be used to fund new industries and increase output for oil and gas,” Loyens & Loeff, which acted as the legal counsel for the facility, noted.

In order to refinance the bridge bank facility with longer term debt, the BlackRock consortium agreed to commence with a dual-tranche financing, including the issuance of the US$1.5 billion project-based Sukuk and a US$3 billion conventional note under a newly established US$11.5 billion global medium-term note program.

The Sukuk structure

“This Sukuk facility is a first-of-a-kind facility which utilizes 25% of the obligor’s privately held shares in AssetCo comprising the Wakalah portfolio in a Wakalah–Murabahah structure.

This Sukuk also has the unique accolade of being the first successfully issued Sukuk based on privately held shares which is also compliant with the enhanced AAOIFI compliance regime applicable in the UAE under the auspices of the Higher Shariah Authority,” Munib told ISFI.

The flexibility and degree of autonomy afforded by the Wakalah–Murabahah structure was necessary to ensure that the obligor remained in compliance with its various obligations under the senior finance documents and the shareholders’ agreement with Saudi Aramco.

In the structuring of the Sukuk a number of structures were explored including a Mudarabah–Murabahah structure. Ultimately, it was decided that given the commercial factors involved, namely the highly structured instrument being marketed in the UAE and the Dana Gas stigma associated with Mudarabah, it was more appropriate to proceed with a Wakalah structure, Munib detailed.

According to Munib, several challenges were faced in the structuring of the Sukuk including the exercise price at the fair market value due to the added complexities of using privately held shares as the underlying asset.

Based on AAOIFI standards, the exercise price payable by an obligor under a purchase or sale undertaking must be based on the fair market value of the shares, meaning that the exercise price cannot be structured as the sum of the face amount of the certificates then outstanding and any due and unpaid distributions.

In the context of publicly listed shares, this would be a relatively straightforward exercise; however, in the context of this Sukuk facility which uses privately held shares, it is a significantly more complicated exercise and required a detailed analysis of the underlying contracted cash flows to ensure that AssetCo is capable of generating distributions that would be capable of delivering an exercise price sufficient to meet the Sukuk issuer’s obligation to pay the dissolution distribution amount.

The TMS Sukuk structure worked because of the nature of AssetCo’s business; it is an entity with limited operational risk which owned key infrastructure assets capable of generating future cash flows on a contracted basis attributable to the Wakalah assets arising from underlying long-term contracts, Munib explained.

The landmark issuance may mark a turning point in the GCC financing space, particularly in the Saudi market where financing has traditionally taken the banking sector and public financing route.

Commenting on the capital market space in the GCC, Bashar Al Natoor, the global head of Islamic finance at Fitch Ratings, told ISFI that pure project finance Sukuk such as this one is a trend and a development that is worth watching in the region.

TMS Issuer Sarl’s Aramco Project Finance Sukuk

US$1.5 billion

20th February 2023
Summary of terms and conditions
TMS Issuer Sarl
GreenSaif Pipelines BidCo S.a.r.l
Size of issue
US$1.5 billion
Mode of issue
144A/Reg S Trust Certificates
To refinance the US$13 billion bridge facility utilized by the obligor to acquire a 49% shareholding in AssetCo from Saudi Aramco.
10 years
Profit rate
5.78% per annum
US dollar
Maturity date
20th February 2032
Lead manager(s)
BNP Paribas
ABC International
Abu Dhabi Commercial Bank
Aljazira Capital
Al Rajhi Capital
Bank of China
BofA Securities
Citi Group
China Construction Bank
First Abu Dhabi Bank
Gulf International Bank
Mizuho Bank
Riyad Capital
Societe Generale
Standard Charted Bank
SNB Capital
Governing law
English law save for the purchase agreement which is governed by Saudi law as this relates to the purchase of an ownership interest in AssetCo.
Legal advisor(s)/council
Al Tamimi & Company
Arendt & Medernach
Khoshaim & Associates
Loyens & Loeff Luxembourg
Simpson Thacher & Bartlett
Islamic structure
London Stock Exchange
Underlying asset
25% of the obligor’s shares in Aramco Gas Pipelines and the deferred sale price from the commodity Murabahah
‘A (positive)’ by Fitch Ratings, ‘A1 (stable)’ by Moody’s Investors Service
Shariah advisor(s)
Dr Mohamed Ali Elgari
Face value/minimum investment

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