The lead arranging group for the commercial debt tranche of the multi-tranche financing package for Bahrain Petroleum Company (Bapco)is expected to be mandated by early August, sources close to the deal say.

The overall package is expected to be worth about $650 million, and part of it will take out the $150 million, receivables-backed one-year bridge facility provided by BNP Paribasand HSBC. These two banks are now acting as the structuring agents on the entire facility at the request of the Ministry of Finance & National Economy, although Bapco continues to be the client (MEED 4:6:04).

The banks that bid for the original financing package are expected to be invited into the commercial tranche. They are Arab Banking Corporation, Arab Petroleum Investments Corporation, Bank of Bahrain & Kuwait, Gulf International Bankand National Bank of Bahrain.

‘We are looking at a 12-year deal with pricing starting at about 90 bp [basis points over Libor] pre-completion, stepping up to about 110-120 bp,’ says a banker.

Bankers say that discussions have reached an advanced stage with the Japan Bank for International Co-operation for a $150 million loan, and a further $150 million tranche could come with cover from Nippon Export & Investment Insurance (Nexi).

A $200 million, Islamically-structured facility is also being put together. It is expected that Kuwait Finance Housewill provide $100 million, with the remaining $100 million possibly coming from a consortium comprising Abu Dhabi Islamic Bank, BNP Paribas, HSBC and the Islamic Development Bank.

‘There is a possibility that the deal could be increased in size to $800 million or more, depending on whether Bapco receives approvals for plans to go ahead with the desulphurisation and other bolt-on contracts,’ says the banker. ‘The picture should be clear by September.’