ABN AMRO and Saudi Hollandi Bank close largest ever Greenfield project financing in Saudi Arabia

ABN AMRO and its 40%-owned affiliate Saudi Hollandi Bank acted as Financial Advisor to YANSAB on the deal which raised USD 3.5 billion of debt.

ABN AMRO acted as the sole Bookrunner and Initial Mandated Lead Arranger, fully underwriting the commercial debt financing. The deal was syndicated to a well-diversified group of local/regional and international banks. This is the largest ever deal in the Middle East and North Africa that was done on a sole bookrunning basis.

Yansab and its advisors sought to maximise the use of Islamic loans, raising close to USD 850 million making this the largest Islamic tranche in any multi-sourced project financing closed to date globally. Public Investment Fund (PIF) participation was also maximised at SR 4 billion (USD 1.067 billion) in a strong show of confidence in the project. Islamic Development Bank (IDB) participated for USD125 million in the Islamic tranche. European Export Credit Agencies, ECGD of the UK and SACE of Italy, also provided comprehensive cover for loans from commercial banks totalling USD 700 million. The balance of the required funding came from 19 domestic, regional and international banks. The deal was significantly oversubscribed and a general syndication phase was expected to follow the senior phase. However as a result of the first phase success, ABN AMRO, as sole Bookrunner, in consultation with Yansab decided to close the deal without any general syndication.

Mutlaq Al-Morished, Chairman of the Board of Directors of YANSAB and SABIC Vice President for Corporate Finance, commented: "This broad participation clearly reflects the confidence of these institutions in the future of YANSAB and the petrochemical industry in the Kingdom of Saudi Arabia as a whole".

Colin Macdonald, Country Executive UAE and Regional Head Middle East at ABN AMRO said:
"This transaction underscores ABN AMRO's commitment to the growing business of SABIC and the Saudi economy. Our sector specialists from Dubai and London have worked hard, together with their SABIC and Saudi Hollandi Bank counterparts in the Kingdom, to arrive at an all encompassing financing, which will set the stage for future Petrochemical transactions in the region".

Giel-Jan van der Tol, Managing Director of Saudi Hollandi Bank said: "We are extremely proud to have been able to assist SABIC and YANSAB in this landmark transaction. This transaction is exemplary for the way Saudi Hollandi Bank and ABN AMRO have positioned themselves in the field of structured financing, whereby execution skills are combined with financial commitments. It is also noteworthy that the Islamic financing tranche was widely well received among the regional banks".

Yansab is a Saudi joint stock company. SABIC owns 55%, a group of 17 local and regional companies owns 10% and Saudi citizens own the remaining 35% following a public subscription process, which was described as the largest of its kind in the Saudi market.

Yansab has completed awarding all engineering, procurement and construction contracts. The implementation works are well on track, according to the plan. The complex is expected to go on stream and enter the stage of commercial production in 2008. It is one of the world's largest petrochemical complexes with an annual capacity exceeding four million metric tons of petrochemical products which will boost SABIC's contribution to national development plans and strengthen its competitive capabilities in the global markets. The complex will also create 1,500 promising job opportunities for Saudi nationals.