‘The conversation was good and, having seen the responses from the bidders, the likelihood is that all of them will find their way into a large lead arranging group, as this deal needs,’ says one of the prospective lead arrangers. ‘I am hoping they will pick the pace up and get the group mandated by mid-June.’ If the schedule is loosely adhered to, a targeted syndication launch in September is expected.
The 10 banks to respond to the request for proposals were Arab Bank, ANZ Investment Bank, Bank of Tokyo-Mitsubishi, BNP Paribas, Credit Agricole Indosuez, Gulf International Bank, HSBC, Mizuho Financial Group, Societe Generaleand Sumitomo-Mitsui Banking Corporation (MEED 18:4:03).
‘The pricing is going to be pretty good,’ says another of the bidders. ‘We are looking at a probable average of 130 bp [basis points over Libor], and fees of about 150 bp. This is a nice deal.’ It is expected that the commercial tranche will have a step-up structure that is likely to start at about 95 bp.
The banks were invited to bid for a hybrid banking package made up of four tranches. The first is a 14-year commercial tranche worth $593.8 million, the second a $261.9 million facility for which political risk and possibly commercial risk cover is being provided by Nippon Export & Investment Insurance (Nexi). The third is a $111 million standby facility from which drawdowns can be made in the event of cost overruns or for working capital requirements. It is understood that the standby facility will have a much shorter tenor than the other tranches, probably only covering the construction period. The fourth tranche is a $261.9 million loan from the Japan Bank for International Co-operation.
The project’s engineering, procurement and construction (EPC) contract was signed on 19 May (see page 12).