Saudi Arabia’s Maaden Phosphates Company (MPC) has closed a SR11.5bn ($3.1bn) refinancing deal, according to two banking sources.

Saudi Arabian Mining Company (Maaden) announced that its subsidiary had received commitment letters from local and international banks in November 2015.

The refinancing cut borrowing costs on facilities signed in 2008. Without construction risk and a better liquidity situation, pricing from banks should be lower.

Reuters reported in November that it would have a seven-year term, with an amortising structure, meaning it will be paid down throughout the term rather than at the end.

Maaden did not respond to a request for comment.

The original financing comprised a $2.1bn conventional and Islamic syndicated finance deal over 16 years, a $200m 16-year Korean Export Insurance Corporation covered facility, a $400m 16 year facility provided by the Export-Import Bank of Korea, and a $100m revolving working capital facility. The Public Investment Fund provided $1.1bn of direct funding, and the Saudi Industrial Development Fund offered $135m.

The finance was intended to set up Al-Jalamid and Ras al-Khair complexes, costing $5.5bn in total.

The subscribing banks in 2008 were local Al-Rajhi Banking and Investment Corporation, Bahrain’s Apicorp, and Arab Banking Corporation, Jordan’s Arab Bank, local Arab National Bank, the UK’s HSBC, local Bank Al-Jazira, Japan’s Bank of Tokyo Mitsubishi UFJ, local Banque Saudi Fransi, France’s BNP Paribas and Calyon, Riyadh-based Islamic Development Bank, Japan’s Mizuho Corporate Bank, local Riyad Bank, the UK’s Royal Bank of Scotland, local Samba Financial Group, Saudi British Bank, Saudi Hollandi Bank, Saudi Investment Bank, and the UK’s Standard Chartered Bank.

MEED reported at the time that MPC struggled to raise the required amounts due to poor responses from banks to the low guideline pricing in the aftermath of the global financial crisis. It eventually secured margins of 80-115 basis points on the commercial tranche.

But in 2014, the Maaden Waad al-Shamal Phosphate Company, another subsidiary, attracted high levels of interest for a $5bn project financing facility.

MPC is 70 per cent owned by Maaden and 30 per cent by Saudi Basic Industries Corporation.

Three major refinancing deals were in the market as 2015 ended, with companies seeking better pricing and the last of the liquidity in the Saudi banking sector. These include Rabigh Electricity looking to refinance $2bn and Dhuruma Electricity, the project company for PP11 with $2.1bn.