Banks have until 20 October to respond to invitations to sub-underwrite the $1,000 million debt package for the Taweelah A-1 power and water project in Abu Dhabi (see Cover Story).
Invitations have been issued to regional and international banks to join the financing at the arranger stage, taking $100 million, and at the senior co-arranging stage, taking $75 million.
National Bank of Abu Dhabi (NBAD) and Abu Dhabi Investment Company (ADIC) have both precommitted as arrangers, though the size of their commitment has not been revealed.
The facility has a tenor of 18-and-a-half years and a variable price structure which ranges from 110 basis points (bp) over Libor to 140 bp.
‘The tenor is long, as you would expect on power deals of this sort, ‘ says one banker considering participation. ‘But for the regional banks there is an issue in getting their heads round 18-and-a-half years’ tenor. Most have short-term funding and the potential asset/liability mismatch can cause some headaches. But there’s nothing wrong with the credit, the issues are entirely internal.’
It is likely that a sizeable proportion of the facility will be sold into the European and US markets where the capacity to handle long-term exposures is better developed. ‘There is also the issue that this deal is reasonably priced and a number of the foreign banks will see it as a chance to get closer to Abu Dhabi, ‘ says the banker.
When both the arranging and senior coarranging tiers have been put in place, the facility will be launched to general syndication, and this is expected to take place in the first quarter of next year.
BNP Paribas and Citibank are the mandated arrangers of the debt facility (MEED 6:10:00).