The total value of international syndicated loans made to Saudi Arabia, Kuwait and offshore borrowers in Bahrain soared in 1997 to $8,400 million from $3,000 million the year before, according to newly-released figures from the Bank for International Settlements (BIS). The figures mainly reflect the growth of project finance in Saudi Arabia.

The BIS data shows that Saudi borrowers took out $6,000 million worth of syndicated credits in 1997, compared to $1,000 million the previous year. Most of the syndicated borrowing from the kingdom is to finance industrial projects, mainly those connected to the state-controlled Saudi Basic Industries Corporation (Sabic).

Kuwait’s total was unchanged at $1,200 million – the amount of money borrowed by the Equate Petrochemical Company, a joint venture between Kuwaiti firms and Union Carbide Corporation of the US. Offshore borrowers in Bahrain had a total of $1,200 million of syndicated facilities at the end of 1997. Most term borrowers in Bahrain are offshore banks. The BIS does not cover Qatar, another big taker of syndicated loans.

The BIS figures also record changes in the total assets of Middle East countries placed with banks in the OECD countries. These contracted in the third quarter of last year to $125,244 million, the main reason being a drawdown of foreign assets by Saudi Arabia. Egypt’s OECD bank assets fell by 4.9 per cent during the three-month period to $20,942 million.

Bahrain’s offshore banks continued to be net placers of funds with OECD banks. Their total net assets slipped to $1,495 million from $2,292 million during the third quarter of last year. The Bahrain offshore figures are not included in the Middle East totals.