Power & Water Utility Company for Jubail & Yanbu (Marafiq) has completed a SR2.5bn ($670m) loan deal with a group of six local banks. The loan was finally signed on 31 July after being initially launched to the bank market in May.

Although six banks are funding the deal, National Commercial Bank is providing around 45 per cent of the cash for the loan, which is priced at 85 basis points above the Saudi interbank offered rate (Sibor), rising to 140 basis points in the final five years of the 15-year deal (MEED 11:06:10).

The other banks funding the deal include Samba, which is also acting as financial adviser, Banque Saudi Fransi, Arab National Bank, Saudi Hollandi and Sabb.

Marafiq had originally received enough commitments to fund the deal with just three banks. It later decided to form a larger banking group to diversify its funding sources. The low pricing put several banks off lending to the company.

One local banker close to the deal says that some banks would only have been able to fund the loan if pricing had been closer to 200 basis points above Sibor.