Saudi Chevron seeks finance package

28 July 2003
A preliminary information memorandum (PIM) has been issued to international, regional and local banks for a proposed $470 million financing package for Saudi Chevron Phillips Company (SCP).

The PIM outlines the requirements for a 10-year facility which will be partly used to refinance existing loans and will also contain fresh borrowing. About $225 million will be used to replace a $305 million facility signed in 2001, which was itself a refinancing of an original facility, signed in 1997, for the part- financing of a petrochemicals facility in Jubail. The remaining $245 million will be fresh finance for SCP. Banks are expected to have made commitments by mid-September (MEED 11:5:01; 14:3:97).

'At the moment it is looking to do this as a largish club deal, rather than going down the lead arranging and then syndication path,' says a local banker looking at the transaction. 'It will depend on appetite and pricing. It is still early, but looking at other deals that have gone through the market we can expect a margin of around 115-130 bp [basis points over Libor].'

In the 2001 refinancing, the tenor of the original eight-and-a-half-year loan was stretched by 18 months and the margin was tightened to 100 bp from 112.5 bp. A number of international banks left the transaction at this point.

SCP has not appointed an independent financial adviser.

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