Clifford Chance advises on financing of $5.5bn phosphate mine and fertiliser project

MPC is a joint venture between the Saudi Arabian Mining Company (Ma'aden) and the Saudi Arabian Basic Industries Corporation (Sabic). Total debt financing will be $3.96bn.

The clients were 20 commercial and Islamic facilities finance participants led by a set of Initial Mandate Lead Arrangers (Al Rajhi Bank, Banque Saudi Fransi, Calyon, Mizuho Corporate Bank, Ltd., Riyad Bank, Samba Financial Group, Standard Chartered Bank) as well as mandated lead arrangers (Arab Bank plc, Arab Banking Corporation (B.S.C.), Arab National Bank, Arab Petroleum Investments Corporation (API CORP), Bank Aljazira, The Bank of Tokyo-Mitsubishi UFJ, Ltd., BNP Paribas, HSBC Bank plc, Islamic Development Bank, The Royal Bank of Scotland PLC, The Saudi British Bank, Saudi Hollandi Bank, and The Saudi Investment Bank.), Korean ECAs (Export Import Bank of Korea and the Korean Export Insurance Corporation) and Al Rajhi Bank in relation to a separate Islamic facility.

The financing consisted of a 16 year conventional term facility and two 16 year Islamic facilities totalling $2.06bn, a $400m 16 year Korean Export Insurance Corporation covered conventional term facility, a $200m Export Import Bank of Korea 16 year conventional term facility and a $100m revolving working capital facility. The Islamic facility is the largest to date for a Saudi project co-financing.

Qudeer Latif, Islamic Finance Partner based in Dubai comments:

"This transaction represents the largest Islamic financing for a project co-financing in Saudi Arabia to date. Islamic finance across all the asset classes continues to grow and this transaction demonstrates that both regional and international financial institutions are becoming more comfortable in this space. We are delighted to have worked with the financiers on this exciting and important transaction."

Separate funding will also be provided by the Public Investment Fund in Saudi Arabia for $1.067bn and the Saudi Industrial Development Fund for $135m as well as equity funding from the two sponsors, Ma'aden and Sabic.

The Clifford Chance team reviewed project documentation and negotiated the financing documentation for the conventional facilities, two Islamic facilities and the ECA facilities as well as sponsor support, security and intercreditor documentation.

The financing team comprised Malcolm Turner, Greg Englefield, Benjamin Goss and Mark Valenzia. Islamic financing advice was provided by Qudeer Latif, Sandeep Puri and Shauaib Mirza. Project documentation advice was given by Richard Parris and Karl Masternak.

Al Jadaan & Partners Law Firm provided Saudi law advice, with the team lead by Mohammed Al Jadaan and Philip Yip. MPC and the sponsors were represented by Baker & McKenzie.