Syndication for the $410 million Oman gas pipelines debt financing has been some 50 per cent oversubscribed, bankers at the lead arranging level said in early October.
International and regional banks are represented in the syndication list which was expected to be fully documented by 16 October.
Sources close to the deal say they have not been surprised by the good response.
‘Oman is one of the most stable economies in the region, ‘ says one. ‘A lot of banks are keen to get in there.’
Regional banks have been keen to get involved because it is a government-related transaction and they want to be shown to be supporting the government, bankers say.
International players see in the deal attractive pricing and a reliable sponsor in the form of the Oman government. The underlying risk of the package is seen to be at the sovereign level.
The seven banks lead arranging the loan are: BNP Paribas, Arab Banking Corporation, Industrial Bank of Japan, Arab Petroleum Investments Corporation (Apicorp), Gulf International Bank, Greenwich NatWest and Mediocredito Centrale. Four banks have also come in as co-arrangers: Sumitomo Bank as senior co-arranger and Bank of TokyoMitsubishi, Credit Lyonnais and ANZ Investment Bank (MEED 1:9:00).
The loan is to finance about 85 per cent of the total costs of a project to build two gas pipelines, for which the client is Oman Gas Company (OGC). The 12-year package carries interest, payable semiannually, of 65 basis points (bp) over Libor, rising at intervals to 140 bp (MEED 30:6:00).
OGC awarded the construction contracts for the Sohar and Salalah gas pipelines in April. Dodsal of India is to build the 700-kilometre pipeline running from Saih Nihayda to Salalah. A consortium of Saipem and Snamprogetti, both of Italy, with Athens-based Consolidated Contractors International Company (CCC) will build the 305-kilometre pipeline between Fahud and Sohar (MEED 17:3:00).