ICBC chosen as bookrunner for biggest financing deal in Europe, Middle East and Africa as Saudi Arabia aims to raise US$11 billion from syndicated loan
The kingdom’s Ministry of Finance has appointed the bank as coordinator and bookrunner for the long-term senior, unsecured loan, say people familiarIndustrial and Commercial Bank of China’s role highlights the increasing use of Chinese lenders in the Middle EastBanking & financeBloombergPublished: 5:02pm, 18 Sep, 2023Why you can trust SCMP
Saudi Arabia plans to raise US$11 billion from a syndicated loan in what would be the biggest financing deal in Europe, the Middle East and Africa this year, as the kingdom seeks to finance its ambitious investment plans. The kingdom’s Ministry of Finance has appointed Industrial and Commercial Bank of China as coordinator and bookrunner for the long-term senior, unsecured loan, according to people familiar with the matter. The 10-year debt is offering an interest rate of 100 basis points over the Secured Overnight Financing Rate – the usual reference rate when borrowing in dollars, the people said, asking not to be identified because the matter is private. ICBC, as the Chinese lender is known, has invited other banks to participate in the loan and has asked interested parties to respond before mid-October, the people said. It is not immediately clear what the loan will be used for, although the kingdom has a slew of projects in the pipeline as part of a diversification drive championed by Crown Prince Mohammed bin Salman.
While part of that will be funded by oil revenue, the government also needs to attract foreign investment and borrow. Many key bodies investing in Vision 2030 projects, including the Public Investment Fund and its subsidiaries developing the new city of Neom, have already borrowed tens of billions of dollars.