International banks stay away from Oman’s Salalah financing

11 December 2007
Salalah Methanol Company in Oman has concluded its $559m project financing at good spreads given the market conditions, but international banks have largely stayed away from the deal.

Royal Bank of Scotland, which also acted as financial adviser, and WestLB were the only non-regional banks to take part in the deal, despite it being backed by the Omani government.
The 15-and-a-half-year Salalah project’s margins start at 75 basis points, rising gradually to 90 basis points after seven years.
Salalah’s debt has been out in the banking market since before the credit squeeze started to push up borrowing costs for international banks.
The banks that took part in the deal where Arab Bank, Bank Dhofar, Bank Muscat, Commercial Bank of Qatar, Gulf International Bank, Intesa San Paulo, Mashreqbank, National Bank of Abu Dhabi, National Bank of Oman (financial adviser), Oman Arab Bank, Oman International Bank, Royal Bank of Scotland (financial adviser), and West LB.

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