The winning coalition ended the gas pipeline deal for Aramco Saudi Arabia From an agreement with 19 banks to provide transit financing worth 13.4 billion dollars to finance the deal, the total value of which is regarding 15.5 billion dollars, according to what banking sources familiar with the matter told Al Arabiya.net.
The consortium of banks involved in providing the financing includes HSBC, JP Morgan, BNP Paribas, Standard Chartered, Societe Generale, Credit Agricole, Citibank, Japan’s Mizuho Group, as well as MUFG and ICBC.
Gulf banks such as Riyad Bank, First Abu Dhabi Bank and Abu Dhabi Commercial Bank are participating in the financing process, in addition to 3 Chinese banks, namely the Agricultural Bank of China, the Bank of China and the China Construction Bank, according to what the sources told Al Arabiya.net, which added that the pricing of the financing, which amounts to Its 7-year term will start at 50 basis points and will increase annually to reach 175 basis points by the end of the financing.
Earlier last month, Aramco announced the completion of the transaction, in which a consortium of investors led by BlackRock, a fixed-asset and investment banking firm, would acquire a 49% stake in Aramco’s Aramco Gas Supply Company, which still retains a controlling stake.
Bonds are present
While a banking source familiar with the progress of the financing process told Al Arabiya.net that the credit facility that the banks will provide will be provided, even partially, through the issuance of long-term bonds, similar to what happened in the oil pipeline deal, during which the winning coalition led by EIG raised regarding $2.5 billion from Issuance of bonds.
The source added, “Despite the difficult conditions faced by the oil pipeline deal bonds, the winning coalition in the gas pipeline deal is considering using the same mechanism while searching for better financing conditions in the bond market.”
And the amount collected through the issuance of bonds to finance the oil pipeline deal is less than the target, which was between 3.5-4.5 billion dollars at the time
It provides financial advice services to the deal winning consortium BNP Paribas.
