State-owned oil giant Saudi Aramco is seeking to raise $12.5 billion in debt to help finance its joint venture with Dow Chemical, according to a report in Project Finance International (PFI), a unit of Thomson Reuters. Saudi Aramco has sent an information memorandum to local and international banks detailing the US$20 bln project with Dow Chemical. The project is due to be completed in 2016, and will produce more than 3 mln tpa of petrochemicals. The multi-tranche, multi-tenor financing strategy will include an export credit agency (ECA) portion, a commercial bank tranche and a capital markets part, most likely a 144a issue, open to U. S. investors, or an Islamic bond. The overall financing will mature after 16 years while the ECA portion will have a tenor of 17 years. The financing includes completion and construction guarantees from Aramco and Dow Chemical.
Banks have eight weeks to respond to the memorandum, with bids due after the Holy month of Ramadan which is expected this year to end in the third week of August.Indicative sizes for all the three tranches range from at least US$5 billion from the ECA portion to about US$2.8 bln from commercial bank lending potentially in both Saudi riyals and dollars, and about US$1.4 bln from a bond deal. |
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