Saudi Arabian Mining Company (Maaden) has set pricing on the $1bn commercial bank loan for phase two of its aluminium project at about 20 basis points cheaper than the loans put in place for phase one of the project last year.

The pricing is expected to start at 145 basis points above the Saudi interbank offered rate (Sibor) for a Saudi riyal denominated tranche, and 185 basis points above the London interbank offered rate (Libor) for a dollar tranche. The riyal tranche is expected to make up the bulk of the loan after only a few international banks responded to the deal.

The total Maaden will raise for phase two of the project, which includes a bauxite mine and alumina refinery, is $3.6bn (MEED 06:05:11). Maaden and the US’ Alcoa, its joint venture partner on the project, have already received indicative commitments of about $4bn. These are expected to be scaled back significantly in the final deal.

Maaden is also expected to approach banks for a corporate facility of up to $500m later in 2011, which is expected to take advantage of the strong interest shown in lending to the company during the aluminium project financing, which will total more than $10bn for both phases.