Banks underwrite compound leasing venture

08 February 2002

A group of four banks is putting together a $900 million loan for a venture that is leasing military compounds to the Ministry of Defence & Aviation (MoDA) in the Jeddah region.

The banks are understood to be Barclays Capital, Dresdner Bank, Mizuho Financial Groupand Saudi American Bank. They have each agreed to underwrite $225 million portions of the nine-year facility. It is expected to go into syndication in the next few weeks.

The borrower is the local Compound Leasing Company (CLC), which has long-term rental agreements with MoDA for the facilities. The purpose of the loan is to enable CLC to secure funds in advance of these rental streams. The pricing of the loan has not been disclosed.

It is understood that the structure of the facility includes a provision giving the participating banks recourse to the Finance & National Economy Ministry, on behalf of MoDA.

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