Maaden loan priced at under 1 per cent

13 June 2012

Mining giant Maaden raising $1.9bn after deal was about 2.5 times oversubscribed

Saudi Arabian Mining Company (Maaden) has agreed pricing of just 85 basis points above the Saudi interbank offered rate (Sibor) for a SR7bn ($1.9bn) five-year loan.

Several banks in the kingdom are understood to have tried to push for higher pricing on the loan, but were unsuccessful in the face of strong pressure within lenders to book new deals. Maaden will also pay upfront fees of 95 basis points.

“The deal was around 2.5 times oversubscribed, so Maaden was in a good position to squeeze the banks on pricing,” says one banker in Riyadh.

The deal will be funded by a group of banks comprising the local National Commercial Bank, Samba, Riyad Bank, Banque Saudi Fransi, Al-Rajhi, Bank Al-Jazeera, Bank al-Bilad, Saudi Investment Bank, and the US’ JP Morgan.

Maaden is currently in the process of looking for an adviser for its second major phosphates project, a phosphate mine in Umm Wual, in the north of the country. The project is expected to cost around $6bn to develop and according to sources in Riyadh the firm is expected to appoint an adviser on the scheme before the end of June.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.