Aluminium Bahrain (Alba)has sent out commitment letters to banks for $1,250 million of financing for its fifth potline project. The borrowings, made up of four separate tranches, are expected to be finalised by the end of December, with a fifth tranche - a $300 million commitment from the Japan Bank for International Co-operation (JBIC) - due to be concluded in early 2003 (MEED 1:11:02).
The largest element of the $1,550 million finance package will be a $500 million commercial loan, which is to be lead arranged by a group of nine banks. They are: Mizuho Financial Group, Sumitomo-Mitsui Bank, Bank of Mitsubishi-Tokyo, HSBC, Gulf International Bank(GIB), National Bank of Bahrain (NBB), Bank of Bahrain & Kuwait (BBK), Qatar National Bank (QNB)and National Bank of Abu Dhabi (NBAD). The 10-12 year loan will be priced at 80-120 basis points (bp) over Libor.
'There are one or two issues, such as insurance, that still need to be ironed out, but it is almost there,' a banker involved in the transaction said in late November. 'With banks underwriting $55.5 million each and holding $50 million to begin with, syndication should proceed smoothly.'
For the $250 million Islamic tranche, four banks are expected to be appointed lead arrangers. They are ABC Islamic, Dubai Islamic Bank, GIB and BBK.
Four institutions have also been selected to arrange a $200 million, Bahrain dinar-denominated bond. They are the local Securities & Investment Company (Sico), Gulf Investment Corporation (GIC), NBB and BBK.
The fourth tranche will be a $300 million, metal-linked facility, to be handled by Goldman Sachsand GIB.
Taylor-DeJonghis Alba's financial adviser, while Norton Roseis acting as legal adviser. The fifth potline will produce 307,000 tonnes a year of aluminium.
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