Saudi Arabia working with banks to refinance $10 bln loan

Saudi Arabia is working with three global lenders – HSBC, JPMorgan, and Mitsubishi UFJ Financial Group – to refinance its existing $10 billion international syndicated loan, Reuters reported, citing banking sources.

The refinancing, which will involve more European, American and Japanese banks, is expected to be completed by mid-February.

The total amount to be refinanced has not been finalized and depends on how much Saudi Arabia raises from other fund-raising exercises, such as international bonds and local currency sukuk issuances.

A spokesperson for Saudi Arabia’s Debt Management Office said it is coordinating the transaction directly with all financial institutions.

In January, Fahad Al-Saif, president of the DMO, said the Kingdom had invited banks to submit proposals to refinance its $10 billion international syndicated loan.

The deal includes repricing of the existing debt facility, extension of maturity to 2023 from 2021, and adding a new tranche to the loan using Murabaha system.

Separately, the Kingdom is planning to sell a new US dollar-denominated bond in the next few weeks, Reuters reported.