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.”
