Aramco facility heavily oversubscribed

09 August 2002

Syndication of a $2,000 million loan for Saudi Aramcowas expected to close heavily oversubscribed on 9 August. Most of Aramco's key relationship banks invited into the transaction have made commitments, though a handful of international banks were still to reply formally as MEED went to press. JP Morganis acting as global bookrunner for the loan and Riyad Bankis the GCC co-ordinator.

It is understood that the international participants in the transaction include Bank of America, BNP Paribas, Deutsche Bankand HSBC Investment Bank. Gulf International Bank and Arab Bank are the only non-Saudi regional banks to participate and they join The National Commercial Bank, Saudi American Bank, Riyad Bank, Arab National Bank, Al-Bank Al-Saudi Al-Fransi, Saudi Hollandi Bankand Saudi British Bank in the deal.

'The term sheet gives Aramco the option to increase the facility in the face of over-subscription, or they will have the option to scale back the participants on a pro rata basis,' says a banker close to the transaction. 'We will have to wait and see.' It is expected that the documentation will be completed well before the end of August.

Banks were invited to subscribe to take-and-hold tickets with a minimum size of $100 million. The five-year loan has been priced at 25 basis points (bp) over Libor, with a clause raising the margin to 30 bp if more than half the facility is used. Banks have been offered 10 bp in fees (MEED 19:7:02).

'Although these are take-and-hold tickets, there is bound to be a lot of activity in the secondary market for a transaction like this, and it will be interesting to see where it gets priced,' says another banker involved in the deal.

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