State-owned Saudi Arabian Oil Company (Saudi Aramco) has leveraged on its strong credit profile to massively oversubscribe the renewal of its US$4bn revolving credit facility.
The facility, which received an oversubscription of almost 250%, drew the commitment of 28 participating financial institutions.
The dual-tranche facility is split into a five-year US$2.5bn tranche, of which US$1bn is a 364-day facility, and
a five-year US$1.5bn-equivalent Saudi riyal tranche which was offered exclusively to Saudi financial institutions.
All tenors pay a very low margin to the banks; the average margin for the five-year facilities is just 16 basis points (bps), while the one-year facility pays 13bps.
The funds will be used to replace Saudi Aramco’s existing credit facility, which it signed in 2006.
In a statement, Saudi Aramco took note of the “continued confidence in the company by the global banking community, as reflected in the terms of the 2010 revolving credit facility agreement, despite the difficult global credit market conditions”.
Riyad Bank and Saudi British Bank (SAAB) were bookrunners for the Saudi riyal tranche and were joined by the National Commercial Bank and Samba Financial Group as mandated lead arrangers.
Arab National Bank, Banque Saudi Fransi, Saudi Hollandi Bank and Saudi Investment Bank joined as arrangers for the US$1.5bn equivalent tranche.
Saudi Aramco took note of the “continued confidence in the company by the global banking community despite the difficult global credit market conditions”.
The Bank of Tokyo-Mitsubishi, BNP Paribas, Citi, HSBC and JP Morgan were bookrunners for the US dollar tranche.
Bank of America Merrill Lynch, Crédit Agricole, Deutsche Bank, Mizuho and Société Générale participated as mandated lead arrangers for the deal.
Finally, Arab Bank, Barclays, Goldman Sachs, Gulf International Bank, Intesa Sanpaolo, National Bank of Kuwait, Northern Trust, Standard Chartered, SMBC and RBS were arrangers for the US dollar tranche.
Of all the banks involved, HSBC was the US dollar facility agent and Riyad Bank was chosen to be both facility agent and Saudi riyal facility agent.
Law firm White and Case acted as legal counsel to Saudi Aramco, while Allen and Overy acted on behalf of the lenders.