Aramco-Petronas JV seeks $9.7bn facility

Riyadh – Mubasher: Saudi Aramco and Malaysian state energy firm Petroliam Nasional Berhad (Petronas) have started discussion to obtain a 15-year loan at a value of $9.7 billion for their joint venture (JV) Refinery and Petrochemical Integrated Development (RAPID) project.

The two oil and gas giants asked lenders to present their revised proposals, especially that are related to pricing, by the end of this week, while banks have already responded to an initial request for proposals, Reuters reported on Monday, citing LPC, a fixed income news service.   

The new loan includes three tranches, namely the first is an export credit agency facility, the second is a covered portion by the export credit agency (ECA), and the third is an uncovered commercial piece of around $3.08 billion.

“The uncovered commercial tranche will carry different interest margins tied to completion of the project,” the London-based news agency noted.

The pre-completion period is expected to be two years, during which Petronas and Aramco will provide guarantees, and the all-in pricing is likely to be around 80 basis points over the London Interbank Offered Rate, LPC said.

The period before finishing the project is expected to last for two years, during which Aramco and Petronas will provide guarantees.

“All-in pricing is likely to be around 80 basis points over the London Interbank Offered Rate, [and] after the project is completed, guarantees fall away and the pricing will increase to around 150 bps,” Reuters indicated.

The Saudi and Malaysian oil firms evenly own the $27 billion complexm while refinery activities are scheduled to start in 2019, with petrochemical operations to follow six to 12 months later.

Mubasher Contribution Time: 10-Sep-2018 09:18 (GMT)
Mubasher Last Update Time: 10-Sep-2018 09:36 (GMT)

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