Saudi Basic Industries Corporation (Sabic) is seeking responses from banks for a $2bn loan deal that is expected to be priced at about 40 basis points above the London interbank offered rate (Libor).

The deal is being arranged by Japan’s Bank of Tokyo Mitsubishi, Sumitomo Mitsui Banking Corporation, Mizuho, Netherland’s ING, and the US’ Citigroup. Sabic Capital, a subsidiary of Sabic responsible for financing, is the borrower in the deal.

Responses from banks are understood to have been submitted at the end of May. The deal will have a tenor of five years and proceeds will be used to repay an existing facility.

The company is also understood to be working on a large bilateral deal with the local Al-Rajhi, possibly for as much as $1bn, the latest in a number of bilateral deals between the industrial company and Saudi lenders. In mid-2010 the company completed loans of SR3.75 ($1bn) with the local Alinma, and a further SR4.5bn with National Commercial Bank. Deals with Banque Saudi Fransi and Sabb were also completed last year.

Sabic is 70 per cent owned by the government of Saudi Arabia and is involved in the production of petrochemicals.