Deutsche Bank, China Development Bank and Emirates NBD will act as initial mandated lead arrangers and bookrunners for the deal, according to a company statement.
The transaction is split between two facilities – a $800m senior secured term loan and a SR3.97bn (AED3.89bn) advance payment guarantee (APG) – partially funding the King Abdullah Project 2 scheme which the company is completing on behalf of the Saudi Ministry of Interior.
A regional banking source said the term loan carried a five-year tenor, with the APG lasting for three years. A spokesman for Saudi Oger did not immediately respond to a request for comment.
French lender Natixis has joined in a mandated lead arranger role for both tranches, while Industrial and Commercial Bank of China has joined for the term loan only.
Abu Dhabi’s Al Hilal Bank and Barclays Capital have been appointed lead arrangers for the APG only.
Deutsche Bank has been looking to arrange a loan for Saudi Oger since mid-March and banking sources said last month that an influential group of banks was close to secure a multi-currency deal worth around $2bn.
The company last tapped the loan market in August 2010, when it completed a $250m loan via Credit Agricole CIB, RLPC data showed. That deal matures in December 2014.
The project facilities, entered into in May 2011, were raised to partially finance the King Abdullah Project 2, which was commissioned by the Ministry of Interior.
The project facilities are the first to be led exclusively by non-Saudi domiciled institutions as part of an ongoing strategy by Saudi Oger to diversify and broaden its financing base for its core infrastructure construction and contracting business.
Mohammed Hariri, senior vice president of Saudi Oger, said: ?We are extremely pleased with the successful completion of the formation of the senior arranging group of banks.”
Hariri said the group of arrangers represents institutions from Europe, the Middle East and China, which are all regions of strategic importance to Saudi Oger Ltd.
?We are very delighted and particularly gratified to the large participation of China Development Bank and Industrial and Commercial Bank of China who once again confirm their undoubted support to Saudi Oger Ltd.,? said Hariri.
?We are also very pleased with the support of Deutsche Bank, Emirates NBD Bank, Natixis, Al-Hilal Bank and Barclays Capital in this transaction,? he said.
?This is a landmark transaction for Saudi Oger and we are very happy to see that the senior arranging group of banks consists not just of existing relationship banks but also banks supporting our endeavours for the very first time therefore underscoring the great interest in the exciting project which is KAP2,? Hariri added.
?We also note the support of these institutions during a period of prolonged market volatility.”
?The King Abdullah Project 2 is of the highest priority for Saudi Oger Ltd., as part of our long history of executing the infrastructure plans of the Kingdom of Saudi Arabia. We look forward to other institutions joining us in the transaction during the syndication process,? he added.
Since its inception, Saudi Oger has become one of the leading construction, facilities management service provider and infrastructure project development companies in the Kingdom of Saudi Arabia and the region. In relatively short period of time Saudi Oger Ltd. has grown into a multi-divisional organisation with subsidiaries and affiliates in the Kingdom of Saudi Arabia and abroad.
Sources: Arabian Business, Arab News, Saudi Oger