Narrative
Full Description
Project narrative
On April 15, 2016, financial close was reached on a deal in which a syndicate of 26 banks — including the London Branch and the Dubai Branch of the Bank of China (BOC), the Hong Kong Branch of the Bank of Communications (BoComm), and China Construction Bank Corporation (CCB) — entered into a $4.700 billion USD syndicated loan agreement with Yanbu Aramco Sinopec Refining Co (Yasref) — a special purpose vehicle (SPV) and joint venture of Saudi Aramco (62.5% equity stake) and China Petroleum & Chemical Corporation (Sinopec) (37.5%) — for the Yanbu Refinery 2016 Refinancing Project. This loan consisted of two tranches: a $3.100 billion USD term loan tranche with a maturity period of seven years, a grace period of zero years, a final maturity date of April 15, 2023, and an interest rate of LIBOR plus a margin of 105 basis points (bps) and a SAR 6 billion ($1.600 billion USD) Murabaha Facility tranche with a maturity period of seven years, a final maturity date of April 15, 2023, and an interest rate of SAIBOR plus a margin of 100 bps. This loan was unsecured. BOC, BoComm, and CCB each contributed $350.00 million USD to the $3.1 billion USD term loan tranche. Record ID#97666 captures BOC's contribution. Record ID#97667 captures BoComm's contribution. Record ID#97668 captures CCB's contribution. 17 lenders contributed to the $3.1 billion USD term loan tranche. In addition to the three Chinese state-owned banks, the following lenders contributed the respective amounts to the loan syndicate: JPMorgan Chase & Co. ($350.00 million USD), Sumitomo Mitsui Banking Corporation (SMBC) ($350.00 million USD), Export Development Canada (EDC) ($250.00 million USD), Deutsche Bank ($175.00 million USD), Mizuho Bank ($175.00 million USD), Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) ($175.00 million USD), BNP Paribas S.A. ($75.00 million USD), Citibank N.A. ($75.00 million USD), Crédit Agricole ($75.00 million USD), Credit Suisse AG ($75.00 million USD), HSBC Bank ($75.00 million USD), Qatar National Bank (QNB) ($75.00 million USD), Standard Chartered Bank ($75.00 million USD), and Morgan Stanley ($50.00 million USD). Nine lenders contributed to the SAR 6 billion Murabaha facility tranche. No Chinese state-owned banks contributed. The following lenders contributed the respective amounts to the tranche: Al Rajhi Bank ($350.00 million USD), Banque Saudi Fransi (BSF) ($350.00 million USD), Riyad Bank ($350.00 million USD), Samba Financial Group ($125.00 million USD), National Commercial Bank (NCB) ($125.00 million USD), Saudi Arab British Bank (SABB) ($125.00 million USD), Bank Albilad ($75.00 million USD), Arab National Bank (ANB) ($50.00 million USD), and Gulf International Bank B.S.C. (GIB) ($50.00 million USD). BOC, BoComm, CCB, EDC, Al Rajhi, and BSF served as bookrunners, mandated lead arrangers, and coordinators. Riyad, NCB, SABB, and Samba served as bookrunners and mandated lead arrangers. BTMU, Mizuho, and Deustche Bank served as bookrunners. SMBC and JPMorgan Chase served as mandated lead arrangers and coordinators. HSBC, Credit Suisse, Standard Chartered, BNP Paribas, QNB, Crédit Agricole, and Bank Albilad served as mandated lead arrangers. Morgan Stanley, ANB, and GIB served as lead arrangers. The London Branch of BOC served as the exclusive correspondent bank for the loan. The proceeds of this loan were to be used by the borrower to refinance shareholder funds used for the construction of YASREF Yanbu Refinery, a full-conversion refinery with an output of 400,000 barrels of Arabian heavy crude oil daily to produce premium transportation fuels, located on a 5.2 million square meter plot in Yanbu Industrial City along the Red Sea coast. Saudi Aramco and Sinopec originally financed the $10 billion USD project with equity; the syndicated loan allowed them to release their equity investment. The refinery was officially launched (for operations) by Chinese President Xi Jinping and Saudi King Salman on January 20, 2016 during a state visit, and was seen as an example of cooperation under the Belt and Road Initiative (BRI).
Staff comments
1. White & Case advised Yasref and Clifford Chance advised the lenders. 2. 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. 3. The Chinese project title is 的沙特延布炼厂项目. 4. A 6-month LIBOR was assumed. The average 6-month LIBOR for April 2016 was 0.903%. Therefore, the interest rate has been coded as 0.903% plus 1.05%, or 1.953%. 5. The individual contributions from the London and Dubai Branches of Bank of China are unspecified. For the time being, AidData assumes that each branch provided equal contributions to Bank of China's $350 million share of the syndicated loan ($175 million each).