A group of 22 banks have signed commitments for the $4.58bn financing for the second phase expansion of Emirates Aluminium’s (Emal) Taweelah smelter project.
The commitments are split between a $3.85bn commercial bank tranche and a $475m Islamic bank tranche. It leaves the financing significantly oversubscribed and reduces the pressure on a planned $1.25bn bond issue, although the project sponsors are understood to still be pursuing that option.
If the project bond does take place, the bank tranches will be reduced, according to bankers involved in the deal. “There is a lot of will behind this to try and develop the region’s first real greenfield project bond,” says one banker. Abu Dhabi’s Mubadala Development Company, one of the sponsors of the Emal scheme along with Dubai Aluminium (Dubal), is understood to be particularly keen to do the bond issue. The bond was originally set to be issued in late 2012, but was delayed until this year as a result of regulatory issues around Mubadala accounting periods.
Banks have not yet been told how much of their commitments the sponsors plan to drawdown. This will only be decided once the project bond has been issued, or called off. Bankers say they are expecting to sign the financing documentation by the end of February.
Pricing on the deal starts at 250 basis points above the London interbank offered rate, peaking at 325 basis points during the life of the 15.5-year loan.
The bank group consists of:
- Bank of Tokyo Mitsubishi (Japan)
- Sumitomo Mitsubishi Banking Corporation (Japan)
- BNP Paribas (France)
- Credit Agricole (France)
- Societe Generale (France)
- HSBC (UK
- Standard Chartered (UK)
- Royal Bank of Scotland (UK)
- KfW (German)
- Export Development Canada
- Citigroup (US)
- Apicorp (Saudi Arabia)
- Samba (Saudi Arabia)
- Abu Dhabi Commercial Bank (UAE)
- National Bank of Abu Dhabi (UAE)
- Emirates NBD (UAE)
- Union National Bank (UAE)
- First Gulf Bank (UAE)
- Abu Dhabi Islamic Bank (UAE)
- Al-Khaliji (UAE)
- Al-Hilal (UAE)
- Islamic Development Bank (Saudi Arabia)