Mandated lead arrangers for the financing of the Sohar Oil Refinery project have changed the syndication strategy for the $907.8m 14 year term loan to save time.
The original plan was to launch a senior syndication followed by a retail syndication. EuroWeek hears that both stages will now be launched simultaneously.
"Documentation has moved along quite rapidly," said one banker involved in the deal. "We are taking a one shot approach in order to meet the deadline." The deal is due to be signed in early November.
The new strategy suggests arrangers are confident of raising capital swiftly. This has not always been the case with other project finance deals in the area recently, however, and some competitors question their certainty.
When the Umm al Nar financing spent three months in syndication, some suggested the deal had struggled in the retail phase because banks had reached their country limits.
Project finance deals, however, remain popular and are seen as a safe investment. One banker involved in the Sohar deal said: "You may not make the sort of money you could with other transactions but you are not risking huge amounts. There is a record of zero loan loss for project finance deals in the Middle East."
Pricing for the Sohar deal is 90bp over Libor during construction, 115bp post-completion to year five, 130bp for years six to eight, 145bp for years nine to 11 and 160bp for years 12 to 14. Three tickets are offered: $35m, $20m and $10m.
Mandated lead arrangers are ANZ Investment Bank, Arab Bank, Bank of Tokyo-Mitsubishi, BNP Paribas (bookrunner), Crédit Agricole Indosuez, Gulf International Bank (bookrunner), HSBC (bookrunner), Mizuho, SG, and SMBC.
The facility is in three tranches: a $645m commercial tranche, a $261m tranche supported by the Nippon Export and Investment Corp (NEXI) under its overseas united loan insurance programme, and a $261m tranche funded by Japan Bank for International Cooperation (JBIC).
The borrower last tapped the market in November 2000 for a $410m 12 year term loan. Mandated arrangers then were Arab Banking Corp, BNP Paribas and Industrial Bank of Japan.
