Power & Water Utility Company for Jubail & Yanbu (Marafiq) has expanded the banking group on its SR2.5bn ($667m) loan to six local banks.

The additional lenders joining the deal are Saudi Hollandi, Arab National Bank (ANB) and Sabb. They will fund the deal in addition to National Commercial Bank, Banque Saudi Fransi and Samba, which is also acting as financial adviser to Marafiq.

Marafiq now hopes to be able to complete the deal by mid-July. One local banker says, “Although Marafiq could have got the money from just two or three banks they wanted to go out to a wider group of lenders and have a more diverse group of banks supporting them.”

The new banks joined the lending group despite Marafiq saying it would pay only 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.

The low pricing shocked many bankers in Saudi Arabia. Some banks had said they would only do the deal if pricing was closer to 150 to 200 basis points above Sibor. One banker involved in the deal says, “Pricing is very low, but Marafiq is strong name with strong shareholders.”

State-owned local companies including Saudi Aramco and Saudi Basic Industries Corporation (Sabic) are shareholders in Marafiq.