Saudi Acrylic Acid Company (SAAC), a joint venture petrochemicals company, has reached financial close on a SR5.09bn ($1.36bn) loan deal to fund the development of three new petrochemicals projects.

The financing was signed on 8 May with a group of nine local banks including Samba, Banque Saudi Fransi, Sabb, National Commercial Bank, Saudi Hollandi, Alinma, Al-Rajhi and Riyadh Bank. Pricing on the deal was set in late 2011 and starts at 170 basis points above the Saudi interbank offered rate (Sibor).

Bankers had been expecting to complete the financing for the project earlier in the year, but where held up by documentation issues.

The financing will be used to fund three petrochemicals projects being developed by joint ventures between the local petrochemicals firms Tasnee and Sahara, and Germany’s Evonik Industries. The three companies are SAAC, Saudi Acrylic Polymers Company (Sapco) and Saudi Acrylic Monomers Company (Samco). The financing is structured so that lenders make one commitment to the three companies, which is split between them based on the size of their overall project cost.

Tasnee has also said it is establishing a SR5.6bn sukuk (Islamic bond) programme, that will be arranged by the UK’s HSBC. The first issue will take place before the end of the year.