Narrative
Full Description
Project narrative
In March 2015, a syndicate of 30 global and regional lenders — including the Bank of China (ABC) — signed a $10 billion USD revolving credit facility (RCF) agreement with Saudi Aramco (state-owned Saudi Arabian Oil Company) — the world's biggest oil exporter — for general corporate purposes. This loan was divided into four tranches: two Islamic Murabaha tranches denominated in Saudi Riyal worth a total SAR 11.25 billion ($3 billion USD), consisting of one SAR 7.5 billion ($2 billion USD) tranche with a maturity period of five years and an interest rate of LIBOR plus a margin of 12 basis points (bps), and one SAR 3.75 billion ($1 billion USD) tranche with a maturity period of 364 days (one year) and an interest rate of LIBOR plus a margin of 10 bps, and two United States dollar-denominated international (conventional facility) tranches worth a total of $7 billion USD, consisting of one $6 billion USD (SAR 22.5 billion) tranche with a maturity period of five years and an interest rate of LIBOR plus a margin of 12 bps, and one $1 billion USD (SAR 3.75 billion) tranche with a maturity period of 364 days (one year) and an interest rate of LIBOR plus a margin of 10 bps. The two five-year tranches had two one-year extension options, for a maximum maturity of seven years. It also included certain limits of the creations of liens or other security interests (negative pledge) or the sale, lease, or transfer of the assets of Saudi Aramco. The proceeds were to be used for general corporate purposes; specifically, the funds were intended to support Saudi Aramco's expansion into new markets and refinance an existing $4 billion USD credit facility. Saudi banks provided the Islamic tranches, while international banks — including BOC — provided the international tranches. Record ID#97557 captures BOC's contribution. In 2019, the lending syndicate entered into an agreement with Saudi Aramco to extend the maturity of the $10 billion USD facility by two years (a new maturity date of March 26, 2022). Record ID#97558 captures BOC's contribution to the debt rescheduling. On June 9, 2020, Saudi Aramco entered into an agreement with the lending syndicate to amend the $6 billion USD five-year tranche to incorporate a SAR 7.5 billion ($2 billion USD) swing line sublimit-facility in support of Saudi Aramco's establishment of a U.S. commercial paper program into the tranche (this did not involve up-sizing of the facility). The RCF ultimately matured in March 2022. Then, on April 4, 2022, a syndicate of 25 banks — including BOC — entered into a $10,000,000,000 USD (SAR 37,500,000,000) syndicated revolving credit facility (RCF) agreement with Saudi Aramco for refinancing, general corporate purposes, and general working capital requirements. This RCF was divided into two tranches: a U.S. dollar-denominated $8,000,000,000 USD (SAR 30,000,000,000) tranche and a Saudi riyal-denominated SAR 7,500,000,000 ($2,000,000,000 USD) Shari’a compliant Murabaha facility tranche. The $8 billion USD tranche included a $2,000,000,000 USD (SAR 7,500,000,000) swingline sublimit facility to be used to support Saudi Aramco's establishment of a U.S. commercial paper program. This RCF was unsecured and carried a maturity period of five years with two one-year extension options. The proceeds of this RCF were to be used by the borrower for general corporate purposes and its general working capital requirements; it replaced (refinanced) the $10 billion USD RCF that matured earlier in March 2022. Record ID#101424 captures BOC's contribution. In addition to BOC, the following lenders contributed to the loan syndicate: Abu Dhabi Commercial Bank PJSC (ADCB), Al Rajhi Bank, Alinma Bank SJSC, Arab National Bank (ANB), Bank Albilad, Banque Saudi Fransi (BSF), BNP Paribas S.A., BofA Securities, Inc., Citigroup Inc., Crédit Agricole Group, Emirates NBD Bank, First Abu Dhabi Bank (FAB), Goldman Sachs Group Inc., HSBC Bank, JPMorgan Chase Bank N.A., Mizuho Bank, Morgan Stanley, MUFG Bank, Ltd., Natixis, Northern Trust Corporation, Saudi National Bank (SNB), Société Générale S.A. (SocGen), Standard Chartered Bank PLC, and Sumitomo Mitsui Banking Corporation (SMBC). HSBC, JPMorgan, and Riyad Bank served as global coordinators, and in January 2022 Standard Chartered was expected to become a joint bookrunner. The participation of HSBC and Standard Chartered in this $10 billion syndicated RCF received criticism of climate non-governmental organization Market Forces, arguing that the participation of the two banks in a loan to the "world's biggest polluter" was an example of hypocrisy in light of those banks' net-zero emission targets. As of December 31, 2022, the entire amount of this RCF was undrawn.
Staff comments
1. Saudi Aramco (Arabic: أرامكو السعودية ʾArāmkū as-Suʿūdiyyah), officially the Saudi Arabian Oil Group (formerly Arabian-American Oil Company) or simply Aramco, is a Saudi Arabian public petroleum and natural gas company based in Dhahran. It is a state-owned enterprise. Saudi Aramco is publicly traded but the Saudi Government owns more than 98% of its shares. 2. The individual contributions of the 25 lenders to this $10 billion syndicated RCF are unknown, including whether each lender contributed to each tranche or, as if in the previous Saudi Aramco RCF, Saudi banks provided the SAR-denominated tranchee and international banks, such as BOC, provided the USD-denominated tranche. For the time being, AidData has assumed that each lender contributed to each tranche, and has estimated the contribution of BOC by assuming that each tranche contributed equally ($400,000,000 USD) to the loan syndicate.