Oil company planning to complete $2bn loan by end of June
State-oil company Egyptian General Petroleum Corporation (EGPC) has given banks until mid-June to respond to requests to finance its $2bn five-year loan facility.
Bankers say that they are currently going through the final stages of credit committee approval in order to respond to the loan requests by the mid-June deadline. Banks have been asked to commit up to $200m to the deal, which pays a margin of 275 basis points above the London interbank offered rate (Libor).
Sources close to the deal say that the response to the loan facility is expected to be strong, enabling them to quickly bring the deal to a close.
One banker involved in the deal says, “EGPC wants to put this together quickly, so once the commitments are in the deal is expected to be closed by the end of June, or early July.”
The deal is structured as a pre-export loan, where banks provide financing to enable a company to sell its products overseas in cases where it has already arranged a buyer. The EGPC deal is secured against naptha exports. A similar $900m-loan that the firm completed in October 2009 was secured against crude oil exports. That deal was arranged by the US’ Morgan Stanley and Japan’s Bank of Tokyo Mitsubishi, and paid a margin of 350 basis points above Libor.
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