Alba first in Bahrain to Refinance $1.247bn existing syndicated loan

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

Aluminium Bahrain (Alba), the world’s largest smelter ex-China, is the first Bahraini Company to have successfully achieved sustainability-linked refinancing for its US$1,247,475,000 Syndicated Loan Facility in connection to the Line 6 Expansion Project.

The US$1,247,475,000 senior-unsecured Conventional and Islamic Facility carries an interest margin of 235 basis points per annum over the sum of Secured Overnight Financing Rate (SOFR) and the Credit Adjustment Spread (CAS). This new facility has an 8-year tenor and the principal amount will be repaid in 16 semi-annual instalments.

The margin is subject to an adjustment (upwards or downwards) on an annual basis by an aggregate amount of up to 2.5 basis point tied to three sustainability-linked key performance indicators: Total Waste Recycled (Solid Waste), Training Hours and Lost Time Injury Frequency’s Incident Count.

This facility comprises two tranches: a US Dollar-denominated senior unsecured conventional termloan facility (the Conventional Facility) of US$537,475,000 and a US Dollar-denominated senior Shari’ah-compliant facility (the Islamic Facility) of US$710,000,000.

Underwriters

Arab Banking Corporation (Bank ABC), Gulf International Bank (GIB) and National Bank of Bahrain (NBB) were the Coordinators and Underwriters of this transaction with NBB and Standard Chartered Bank serving as joint Environment, Social and Governance (ESG) Coordinators.

Alba’s Chairman of the Board of Directors Shaikh Daij bin Salman bin Daij Al Khalifa said: “The oversubscription in the refinancing of our existing syndicated loan facility by 3 times is a vote of trust in Alba, its fundamentals as well as the Kingdom of Bahrain.

We are also equally pleased with the favourable terms of the new syndicated loan facility as we have dropped the interest margin from 300 basis points over LIBOR to 235 basis points over SOFR and CAS.” Bank ABC’s Group Chief Executive Officer, Dr. Khaled Kawan, stated: “The positive response this facility has received in terms of oversubscription, pricing, and the number and diversity of participants, is indeed a testament to Alba’s outstanding credentials and the confidence in Bahrain’s economy.”

The Chief Executive Officer of GIB, Jamal Al Kishi, stated: “Investors who took up the offering have indeed expressed a strong vote of confidence in Alba and its future, and just as importantly underscored the robust appetite they have for ESG-linked exposures.”

“We are also delighted to see that the transaction has achieved all the objectives set by Alba at the beginning of the mandate and, at the same time, attracted substantial oversubscription from a wide range of lenders,” said Hisham Al Kurdi, Chief Executive – Corporate Institutional & Investment Banking at National Bank of Bahrain.

Oversubscribed

The new syndication was oversubscribed by US$2.6 billion and comprises 21 banks.