Call us on
+44 (0) 207 045 0920

Middle East

CASE STUDY: Emirates Global Aluminum Forges Us$4.9bn syndicated loan

Emirates Global Aluminium’s (EGA) US$4.9bn 7-year syndicated facility was executed amidst tightening regional liquidity and emerging market turmoil, but which nevertheless secured aggressive pricing and participation from a wide group of investors.

Jan 16, 2017 // 8:18AM

Deal At A Glance

Deal Type: Syndicated Loan

Location: Dubai, UAE

Borrower: Emirates Global Aluminium (EGA)

Bookrunners, Underwriters: BNP Paribas, Citi, Dubai Islamic Bank, EDC, Emirates NBD, ING Bank, Natixis, National Bank of Abu Dhabi

MLAs: Apicorp, FGB, KFH Capital, Mashreq Bank

Participants: Abu Dhabi Commercial Bank, ABN Amro, Al Hilal Bank, Arab Bank, International Bank of Qatar, Intesa San Paolo IMI, National Commercial Bank, Societe Generale

Legal Adviser to Borrower: Allen & Overy

Legal Adviser to JLM: Clifford Chance

Size: US$4.9bn

Tenor: 7 years

Deal Structure: 3-year grace period, 30% balloon at maturity

Pricing: 195bp over LIBOR

Use of Proceeds: Refinance outstanding loans for the Taweelah aluminium smelting complex in Abu Dhabi

Background

In October 2015 EGA entered into initial discussions with several relationship banks to help refinance existing project finance loans initially secured in 2007 and 2012 linked to the company’s Taweelah aluminium smelting complex in Abu Dhabi, UAE.

On 23 November 2015 the company launched syndication of a US$4.9bn loan facility with a tenor of 7 years with initial price thoughts in the region of 200bp above LIBOR.

Syndication of the facility closed at the end of February 2016.

Transaction Breakdown

EGA’s US$4.9bn 7-year syndicated facility was structured with a three-year grace period and a 30% balloon at maturity.

All-in pricing for the facility came in at 195bp over LIBOR, about 80bp lower than the original project loans being refinanced.

The majority of the facility (60%) was sold down to UAE and GCC Islamic and conventional financial institutions, with at least one bank participating from each GCC country.

The remainder of the facility was syndicated to a combination of French, Dutch, and American banks.

Samer Jumean, Head of Financing and Capital Markets at EGA said the deal has helped successfully optimise the company’s capital structure and diversify the company’s access to liquidity.

“The market obviously experienced some significant challenges while the deal was being syndicated, including a liquidity crunch and a commodities downturn, which has a slight impact on pricing and,” Jumean said.

“When you’re syndicating in this kind of environment you can’t rely solely on your banks – even your closest relationship banks, which in our case were involved with the deal – to sell your story. You have to take an active role throughout the syndication, which means taking your story directly to a range of global players. That’s what we’ve done, and why the deal was successful in our view.”

Middle East

Bonds & Loans is a trusted provider of news, analysis, and commentary that helps illuminate the most significant issues, events and trends impacting the global emerging credit markets.

Recommended Stories