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Saudi Arabia closes US$16b loan


SAUDI Arabia has closed an increased US$16 billion syndicated loan that refinances a US$10 billion facility signed in 2016, according to banking sources.

The deal, which closed on March 19, comprises a US$8.35 billion term loan and a US$7.65 billion murabaha financing.

HSBC, JP Morgan and MUFG were coordinators, bookrunners and mandated lead arrangers on the deal with Bank of China, Citibank, Credit Agricole, ICBC, Mizuho Bank, Standard Chartered and SMBC as bookrunners and mandated lead arrangers.

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

As well as the introduction of the Islamic finance tranche, the new deal included the extension of its maturity to 2023 from 2021 and a repricing.

Pricing on the deal is 30 per cent lower than on the original loan, which paid 120bp over Libor, bringing pricing on the new deal to 84bp over Libor.

The original five-year loan was also coordinated by HSBC, JP Morgan and MUFG, which were joined by BNP Paribas, Bank of China, China Construction Bank, Citibank, Credit Agricole, Deutsche Bank, Goldman Sachs, ICBC, Mizuho Bank, Morgan Stanley and SMBC.

The Saudi government started issuing debt in the international markets through loans and bonds two years ago in order to refill state coffers hit by a slump in oil prices.

Saudi Arabia's Vision 2030 is a plan to reduce the kingdom's dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation and tourism. REUTERS