Seven of the eight banks invited to join the transaction did so, with only Bank of Bahrain & Kuwait
declining. The facility was split into a $370 million conventional tranche and a $330 million Islamic tranche. Arab Petroleum Investments Corporation (Apicorp)
, BNP, Gulf International Bank
, HSBC and National Bank of Bahrain
offered both Islamic and conventional solutions, Arab Banking Corporation
and Mizuho Financial Group
offered only conventional finance and Dubai Islamic Bank
and Kuwait Finance House
offered only Islamic.
Fees were 105 basis points (bp) and the debt has a step-up pricing structure of 85-105 bp. BNP is acting as commercial documentation agent and HSBC is Islamic documentation agent.
A further $300 million in finance will be split equally between Japan Bank for International Co-operation (JBIC) and a tranche covered by Nippon Export Credit Agency (Nexi). The engineering, procurement and construction management (EPCM) contract on the main element of Bapco’s refinery upgrade programme, the estimated $700 million low-sulphur diesel production (LSDP) unit, is being carried out by Japan’s JGC Corporation
The Bapco financing had originally been designed to fund only the LSDP unit but was upsized to $1,000 million and will now cover the $150 million refinery gas desulphurisation (RGD) project, which received board approval in July, a $100 million base oil plant and a $50 million wastewater treatment plant.