Bloomberg – Saudi Arabia has It plans to obtain an $11 billion syndicated loan Which will constitute the largest financing operation of 2023 in Europe, the Middle East, and Africa (EMEA), at a time when the Kingdom is trying to finance its bold investment plans.
According to sources familiar with the matter, the Kingdom’s Ministry of Finance appointed Industrial and Commercial Bank of China Limited (ICBC) as coordinator and placement agent for the unsecured long-term loan. this The ten-year debt will offer an interest rate of 100 basis points Regarding the guaranteed financing rate for one night, which is the usual reference rate for loans in dollars, these sources explained, who requested anonymity because it is a private matter.
The Industrial and Commercial Bank of China, as the Chinese lender is known, has invited other banks to participate in the loan and urged interested parties to respond by mid-October, the sources said. The fate of this loan remains unclear, although the Kingdom has a number of projects underway as part of diversification efforts led by the Crown Prince. Mohammed bin Salman.
However, the Govt It needs to attract foreign investment and access to credit. Several key agencies investing in Vision 2030 projects, such as the Public Investment Fund and its affiliates developing a new city, NEOM, have borrowed tens of billions of dollars.
A Finance Ministry representative did not immediately respond to requests for comment outside business hours on Friday. A representative of the Industrial and Commercial Bank of China was not immediately available for comment.
The kingdom’s deal would boost the syndicated loan market in Europe, the Middle East and Africa, which has seen a 27% decline so far this year, according to Bloomberg data. It also highlights the growing use of Chinese lenders in the Middle East. According to the data, major Chinese banks, such as the Bank of China (BOC) and the Industrial and Commercial Bank of China (ICBC), have risen in loan broker rankings every year since the pandemic.
Data show that the Industrial and Commercial Bank of China jumped this year seven places to eleventh place in the table of lending intermediaries for Middle East loans, while the Bank of China rose four places to thirteenth place.
Saudi Arabia is in talks to raise funds after that Its budget deficit will widen in the second quarter When the government increased spending on social benefits and projects aimed at diversifying its economy. A series of oil production cuts and falling prices may cause the Kingdom’s economy to contract this year. In July, the International Monetary Fund gave the kingdom the largest growth cut among major economies this year.
With assistance from Matthew Martin.
Read more at bloomberg.com
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