Saudi Aramco Secures US$10 Billion Term Loan
Saudi Aramco has secured a new US$10 billion term loan from a consortium of 10 of its core relationship banks, led by HSBC, SMBC and First Abu Dhabi Bank.
The loan, which has an opening margin of 50 bps over LIBOR, has a 1-year term with an extension option for another year at the lenders’ discretion.
According to reports, HSBC, SMBC and First Abu Dhabi Bank acted as coordinators, book-runners, and mandated lead arrangers for the loan. In addition, BNP Paribas, Citigroup, Credit Agricole, JP Morgan, Mizuho, MUFG Bank, and Societe Generale acted as mandated lead arrangers and book-runners.
While the loan is expected to be used for general corporate purposes, sources have revealed that part of the financing is likely to be used by Saudi Aramco to fund its previously announced acquisition of a 70% stake in petrochemical major Saudi Basic Industries Corp. (SABIC) from the country’s sovereign wealth fund. The SABIC deal is reported to be worth US$69.1 billion.
Earlier this week, Saudi Aramco reported a 25% drop in net profit for Q1-2020 due to the steep fall in crude oil prices since the start of the year. However, despite the drop in earnings, it assured investors that its dividend payout for the quarter will be in line with its previous announcement to pay US$75 billion in annual dividends to its shareholders this year.