Bank of China contributes to a SAR 10.782 billion syndicated loan to Mobily for refinancing and working capital purposes

Project narrative

On March 14, 2007, a syndicate of 23 banks — including the Bank of China (BOC) — signed a SAR 10.782 billion ($2.450 billion USD) syndicated loan facility agreement with Saudi telecommunications company Etihad Etisalat Company (Mobily). The facility was divided into three tranches: a SAR 9.1875 billion ($2.450 billion USD) airtime financing facility with a maturity period of six years with semi-annual unequal installments, a first repayment date of December 31, 2007 (a grace period of about 0.75 years) and a final repayment date of December 31, 2012 with a balloon payment of 33%, and Murabaha profit payable on a quarterly basis to yield the equivalent of 70 basis points (bps) over LIBOR (the facility was Islamic financing, based on selling the airtime minutes to participating banks and re-distributing the minutes to subscribers on behalf of the banks), a SAR 750 million ($200 million USD) working capital Murabaha facility with a maturity period of five period years with a yield the equivalent of 70 bps over LIBOR, and a SAR 843.75 million ($225 million USD) financial support Murabaha facility with a maturity period of one year. The airtime financing facility was fully drawn on March 29, 2007 to repay maturing obligations such as a short term bridge loan worth SAR 7.1 billion and founding shareholders' loan, while the other two facilities were undrawn as of the end of 2007, with the support facility intended to fund a debt service reserve, to lock up large amounts of cash that would otherwise be used for operations or to pay dividends. The two Murabaha facilities remained utilized as of December 31, 2009. During the first quarter of 2012, Mobily entered into a sharia-compliant SAR 10 billion long-term refinancing agreement; the proceeds were used to the settle, among other things, the outstanding balance of the SAR 10.782 billion loan. In addition to BOC, the following lenders contributed to the loan syndicate: Crédit Agricole, National Bank of Abu Dhabi (NBAD), Royal Bank of Scotland (RBS), Samba Financial Group, Banque Saudi Fransi (BSF), Calyon, Saudi Hollandi Bank, ABN AMRO Bank NV, National Commercial Bank (NCB), Al Rajhi Bank, BNP Paribas S.A., DBS Bank, Société Générale S.A. (SocGen), Citigroup, Abu Dhabi Commercial Bank PJSC (ADCB), Commercial Bank of Dubai PSC (CBD), Bank Aljazira (BAJ), Fortis Bank, ING Bank N.V., Bank Muscat, Riyad Bank, and Barclays Bank. BOC, Crédit Agricole, NBAD, and RBS served as bookrunners. ABN AMRO, BSF, Calyon, NBAD, NCB, Samba, and Saudi Hollandi Bank served as arrangers. Al Rajhi, BNP, DBS, RBS, SCB, SocGen, Citigroup, ADCB, CBD, BAJ, Fortis, ING, Bank Muscat, Riyad Bank, and Barclays served as participants. Syndication was done in May 2007.