Syndication and documentation for the $300 million refinancing package for Qatar Fuel Additives Company (Qafac) is to be completed by the end of August, says one of the lead arranging bankers.
'We have had positive preliminary responses from the Taiwanese banks and are expecting them to take 40-50 per cent of the syndication,' he says. It is understood that the five lead arranging banks are aiming to sell between $100 million and $150 million during syndication (MEED 26:7:02).
'There was initially a feeling among the Taiwanese banks that the pricing was not as juicy as they were hoping for, but when it is measured against the 35-40 bp [basis points] they get on CPC [ Chinese Petroleum Corporation], they see that it is fair,' says the banker. CPC is one of two Taiwanese shareholders in Qafac. The eight-and-a-half-year refinancing is priced at 75 bp over Libor.
The deal's lead arrangers are awaiting a decision from the Saudi Arabian Monetary Agency (SAMA - central bank) over whether Saudi financial institutions will be granted permission to participate in the transaction.
'Five Saudi banks requested the IM [information memorandum] and we are expecting three to go to SAMA for approval,' the banker says. 'There were a bunch of Saudis in Qafco [ Qatar Fertiliser Company] and this deal has a similar risk profile. But SAMA reviews these transactions on a deal-by-deal basis. When preparing a syndication strategy you have to assume you'll get nothing from Saudi Arabia and treat it as a bonus if permission is given.'
Societe Generale is acting as Qafac's financial adviser (MEED 12:7:02).
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