The facility, which with a tenor of 15 years is one of the longest corporate borrowings in Saudi corporate history, is not being allocated on a pro-rata basis. It is understood that Banque Saudi Fransi, National Commercial Bankand Saudi American Bankwill each take tickets bigger than SR 1,000 million ($267 million), and between them will subscribe to about SR 3,600 million ($960 million). Arab National Bankis expected to take about SR 1,000 million ($267 million), and Saudi British Bankand Saudi Hollandi Bankwill take SR 600 million ($160 million) each.

Bankers close to the transaction say that a very limited syndication could follow and that Gulf International Bank- which is acting as SEC's financial adviser on the transaction - and SIB are probable participants. They say that some of the other regional banks with Saudi banking licences, such as National Bank of Bahrain, Emirates Bank Internationaland National Bank of Kuwait, may also join at a junior level.

The margin on the facility will have a step-up structure, starting at about 130 basis points over the Saudi interbank offer rate (Sibor) and rising twice over the term.

SEC was originally looking for a SR 4,500 million ($1,200 million) financing facility, but strong appetite from the banks supported its expansion (MEED 13:2:04). The funds will be used to part finance SEC's aggressive capital expenditure programme on its transmission and distribution network (MEED 19:3:04). It is understood that the Saudi Arabian Monetary Agency (SAMA - central bank) has rejected requests from some banks for permission to breach their single-creditor ceilings on the transaction and that this has imposed a cap on the maximum size of the facility.

'The strong appetite for this facility bodes well for the future financings of the proposed Shouaiba and Marafiq IWPPs [independent water and power projects],' says a Riyadh-based banker involved in the transaction. 'There is clearly plenty of liquidity for long-tenor deals - though Riyad Bank staying out has been a surprise - and this will be called on.'

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