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Saudi Arabia closes $16bn loan

Saudi Arabia closes $16bn loan
Saudi Arabia has closed a $16 billion syndicated loan

Riyadh – Mubasher: Saudi Arabia has closed a $16 billion syndicated loan, which refinances a 2016-signed $10 billion facility, sources told Thomson Reuters LPC on Sunday.

Closed on 19 March, the loan consists of an $8.35 billion loan and a $7.65 billion murabaha financing, the news agency said.

The five-year loan entails an extended maturity date to 2023 from 2021 and a repricing as well as the introduction of the Islamic financing tranche, the murabaha.

“Pricing on the deal is 30% lower than on the original loan, which paid 120 [basis points (bp)] over Libor, bringing pricing on the new deal to 84bp over Libor,” Thomson Reuters LPC said.

The loan’s coordinators, bookrunners, and mandated lead arrangers were HSBC, JP Morgan, and Mitsubishi UFJ Financial Group (MUFG).

Meanwhile, Bank of China, Citibank, Credit Agricole, ICBC, Mizuho Bank, Standard Chartered and SMBC acted as bookrunners and mandated lead arrangers.

Moreover, BNP Paribas, Goldman Sachs, Societe Generale joined were mandated lead arrangers, while Bank of America Merrill Lynch, Deutsche Bank, and Morgan Stanley acted as lead arrangers, data from Thomson Reuters LPC showed.

The Saudi government began issuing debt, including loans and bonds, on international markets two years ago to support its budget deficit, which began after oil prices more than halved in mid-2014.

Under its Saudi Vision 2030, the government is looking to diversify its economy and income resources as well as lessen its reliance on oil. The Kingdom is also looking to support public service sectors such as health, education, infrastructure, recreation, and tourism.