Narrative
Full Description
Project narrative
In March 2015, a syndicate of 30 global and regional lenders — including the Bank of China (BOC) — 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. Specifically, the funds were intended to support Saudi Aramco's expansion into new markets and refinance an existing $4 billion USD credit facility. 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. Saudi banks provided the Islamic tranches, while international banks — including BOC — provided the international tranches. Record ID#97557 captures BOC's contribution. In addition to BOC, the following lenders contributed to the loan syndicate: the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Citibank, Deutsche Bank, HSBC Bank Plc, JPMorgan Chase & Co., Standard Chartered Bank PLC, Sumitomo Mitsui Banking Corporation (SMBC), Alinma Bank, National Commercial Bank (NCB), Riyad Bank, Abu Dhabi Commercial Bank (ADCB), Australia and New Zealand Banking Group (ANZ), Arab National Bank, Banque Saudi Fransi (BSF), BNP Paribas S.A., Crédit Agricole, Gulf International Bank (GIB), Mizuho Bank, National Bank of Abu Dhabi (NBA), National Bank of Kuwait (NBK), Northern Trust Corporation, RBC Capital Markets, Samba Capital & Investment Management Company, Saudi Arab British Bank (SABB), Saudi Hollandi Bank, and Société Générale S.A. (SocGen). BOC, BTMU, Citi, Deutsche Bank, JPMorgan, Standard Chartered, and SMBC served as bookrunners and mandated lead arrangers on the international tranche. Alinma, NCB, and Riyad served as bookrunners and mandated lead arrangers on the Islamic tranche. Samba Capital and Banque Saudi Fransi served as mandated lead arrangers. ANZ, ADCB, Arab National Bank, BNP Paribas, Crédit Agricole, GIB, Mizuho, NBA, NBK, Northern Trust, RBC Capital Markets, SocGen, SABB, and Saudi Hollandi served as arrangers. In 2017, ANZ sold a portion of its contribution to Goldman Sachs. 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). This loan 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 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.
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 contribution breakdown of lenders to each tranche is unknown. As the $7 billion USD international tranche was provided by international banks, AidData has assumed that the 19 lenders (including BOC) that were non-Saudi Arabian banks were the only lenders of the international tranche (meaning it has 19 lenders). Therefore, for the time being, AidData has estimated the contribution of BOC by assuming that each lender contributed an equal amount ($368,421,052.632 USD) to the international tranche. 3. As the specific individual breakdown of lenders is unknown, it is unclear whether BOC contributed to both the $6 billion USD five-year tranche and the $1 billion USD 364-year tranche. For the time being AidData has treated BOC as having contributed to both tranches, and has taken the average maturity [(5 + 1) / 2 = 3] and average interest rates of each tranche (assuming a 6-month LIBOR, with the 6-month LIBOR for March 2015 being 0.399%) {[(0.399 + 0.12) + (0.399 + 0.10)] / 2 = 0.509%} and coded it as the maturity and interest rate of this project record. 4. The 364-day facilities, despite having a maturity period of one year, is listed in Saudi Aramco's annual reports well beyond its expected 2016 maturity, and then in the 2021 annual report it is said to have a termination date, alongside the other tranches, of March 26, 2022 {{see pg.216 of ID#152875}}. Two possible explanations for this are that the 364-day facilities were not drawn down, with maturity only occurring on drawdown, or that the facilities were repeatedly extended (either through an automatic renewal or through amendments). This issue merits further investigation.