US$6 bln syndicated fund-raising by Saudi Kayan draws interest from major Chinese banks

26-Nov-07

A US$6 billion syndicated fund-raising by Saudi Kayan Petrochemicals Co. (35% owned by Saudi Basic Industries Corp.) to finance a petrochemicals complex has drawn strong interest from major Chinese banks, including Bank of China Ltd. and China Construction Bank Corp. The subprime issue has an insignificant impact on the demand for the project financing, as Saudi Kayan targets banks and not fund managers or other investors. Saudi Kayan is raising a total US$10 billion to fund the construction of a 3.6 mln tpa petrochemicals complex in Jubail Industrial City in Saudi Arabia. The company expects the syndication to be completed by the end of this year or early January. The syndicated loan will likely be divided into tranches of Islamic loans, commercial loan, loans from export and credit agencies, and state-owned Saudi Arabian banks. Saudi Kayan was originally wholly owned by Sabic. But to fund part of the construction cost of the Jubail plant, Sabic earlier this year spun off the firm, which owns and runs the Jubail plant to raise US$1.8 billion.