MIDEAST DEBT Underwhelming Aramco pipelines-linked bonds signal risk for longer tenor Gulf debt | Reuters

MIDEAST DEBT Underwhelming Aramco pipelines-linked bonds signal risk for longer tenor Gulf debt | Reuters

An underwhelming bond sale by investors in Aramco's oil pipelines points to new risks for longer tenor deals from the Gulf, especially unconventional structures, as investors become more selective amid ample supply and worries over a more hawkish Fed.

EIG Pearl Holdings, led by U.S.-based EIG Global Energy Partners, sold $2.5 billion in dual-tranche amortising bonds on Thursday - far short of the $3.5-4.4 billion it was seeking.

Such infrastructure-linked deals out of the Gulf typically target mainly U.S. and European investors, who were kept busy last week with sharp moves in several emerging markets' (EM) debt as well as rising Treasury yields and fears the Fed - already tapering its pandemic-linked bond-buying programme since November - could raise rates sooner than expected.

Orders peaked at around $5 billion and the spreads were unchanged from initial price thoughts - uncommon for Gulf deals, particularly ones associated with big names like Aramco.