Bahrain International Bank (BIB) has picked three banks to arrange a $75 million, five-year credit facility which it will use to refinance existing debt and fund new investments in the West. The three banks are Arab Banking Corporation, Emirates Bank International and ANZ International Bank, and the interest margin on the multi-currency facility is 75 basis points over Libor, with a commitment fee of 25 basis points a year.

'[The loan facility] is for a combination of refinancing existing short- term debt and helping us to fund new investment activity which is accruing at a very healthy rate,' says BIB chief executive Robin McIlvenny. He says the bank is working on two corporate acquisitions, one in the US and one in Europe, and there is a strong probability that the deals will be completed soon. BIB is also working on a public offering in the Gulf which is due to come to the market early next year. Last May, BIB bought 80 per cent of US company Sarah Michaels, which manufactures bath products (MEED 30:5:97).

The facility is a revolving credit, which means that some or all of the amount can be used and repaid more than once within the five-year period. 'We've been able to obtain five-year finance at an all-in cost significantly lower than what we've achieved before,' says McIlvenny. BIB already has medium-term funding in the form of debt securities. Its $60 million, three-year floating rate note matures in mid-1998, and McIlvenny says that the bank may renew and expand this borrowing with a five-year issue. 'We're still relatively under-leveraged,' he says.