International banks have responded with enthusiasm to the debut syndicated loan by Commercial International Bank (Egypt – CIB), which has decided to double the size of the loan from an original $100 million. CIB, which was the first Egyptian company to tap the equity markets with a global depositary receipt (GDR) issue, says banks offered a total of $254 million.

The loan has a maturity of three years and is priced at 40 basis points over the London interbank offered rate (Libor). It was arranged by Chase Investment Bank, Union Bank of Switzerland, Commerzbank and ING Barings. About half the amount of the loan was committed by banks from Europe with the rest coming from the Middle East, Japan and the US.

The pricing indicates the liquid state of global loan markets as well as Egypt’s growing attractiveness as a relatively untapped market with an investment-grade credit rating. The most recent three-year loan to an Arab commercial bank, prior to CIB, was to National Bank of Fujairah in the UAE which secured an interest rate of 55 basis points over Libor. Bigger regional banks like Gulf International Bank and Arab Banking Corporation, with their large balance sheets and worldwide business presence, secure similar or lower pricing for periods of five-seven years.