Full house for Al-Ezzal debt

17 September 2004
All 10 of the international and regional banks invited to join the lead arranging group on the Al-Ezzal Power Companycommercial debt package responded positively to the invitation. Facilities documentation is due to be signed imminently, with financial close expected by the end of October.

The 10 banks are ANZ Investment Bank, Bayerische Landesbank, Calyon, Gulf International Bank, ING Bank, Mashreqbank, Mizuho Financial Group, National Bank of Bahrain, Royal Bank of Scotlandand Standard Chartered Bank. They join HSBCand Societe Generale, which backed the winning bid for the Al-Ezzal independent power project (IPP) by Belgium's Tractebel and Kuwait-based Gulf Investment Corporation. The package will be structured as a club deal.

The facility is split between a $373 million term loan and a $125.7 million equity bridge loan. The 20-year debt - one of the longest tenor transactions to be completed in the Gulf - has a step-up pricing structure which starts at 120 basis points (bp) over Libor for the three-year construction period, drops to 110 bp for years four-nine, rises slightly to 115 bp for years 10-12, then more steeply to 150 bp for years 13-15, to 160 bp for years 16-18 and finally to 175 bp for years 19 and 20. The three-and-a-half-year equity bridge loan has a margin of 40 bp over Libor (MEED 6:8:04).

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