All but one of the international and regional banks responded to the preliminary information memorandum (PIM) to form the mandated lead arranger group for the proposed 12-year commercial debt package for Bahrain Petroleum Company (Bapco).

It is understood that Citigrouphad not submitted a proposal by the 12 September deadline. Arab Banking Corporation, Arab Petroleum Investments Corporation (Apricorp), Bank of Bahrain & Kuwait, Gulf International Bank (GIB)and National Bank of Bahrain are likely to be lead arrangers.

They will join BNP Paribasand HSBC, which have already provided a $150 million bridge loan for the project and are acting as the structuring agents on the entire facility at the request of the Ministry of Finance & National Economy: Bapco remains the client (MEED 4:6:04).

‘Considerably more than the nominal $150 million asked for has been committed by the banks – they have collectively displayed a surprising depth of liquidity,’ says a banker close to the project. ‘The likelihood is that the commercial facility will be upscaled to reflect this.’ Subject to covenants and ratios there is sufficient security to increase the size of the multi-tranche facility, and the government could choose to do so to cover the cost of additional environmental contracts such as the desulphurisation unit.

The proposed $200 million Islamically structured tranche has also been well received. Kuwait Finance House, BNP Paribas, HSBC and GIB have all tabled commitments (MEED 27:8:04).

The third tranche – which banks were not invited to bid for – will be split between a $150 million loan from Japan Bank for International Co-operation and a $150 million component covered by Nippon Export & Investment (NEXI).