The syndication for the $686 million loan for Hub Power Company (Hubco) was oversubscribed by more than 60 per cent when it closed on 5 August. At least 35 banks made offers totalling more than $1,100 million towards financing Hubco's 1,292-MW power station. A final agreement is expected to be signed in mid-September.

A total of 65 banks were invited to join the deal, which opened on 14 June. Banks seeking to participate could choose from five levels of commitment. At the top level, a co-arranging bank was required to offer at least $50 million, with front-end fees set at 2 per cent. At the bottom level, a co-managing bank was required to offer $10 million, with front-end fees set at 1.1 per cent.

Citibank International has co-ordinated the global syndication, assisted by Bank of Tokyo International and Mediocredito Centrale.

The 111/2-year loan will be repayable in 16 equal six-monthly instalments, with a four-year grace period. Of the $686 million credit facility, $60 million will be in standby funds. Loan margins will be 2 per cent over the London interbank offered rate (Libor) for the first eight years and 2.25 per cent over Libor thereafter. The rate for standby loans will be 0.50 per cent above the rate for the loan. Committed but undisbursed loans will incur interest rates of 0.75 per cent above Libor.

Two commercial loan agreements for this project were signed earlier in August. They provided a total of $240 million towards engineering and civil works (MEED 5:8:94).