Mobily seeks SR10bn loan refinancing

LONDON: Etihad Etisalat (Mobily) is seeking a SR10 billion ($2.7 billion) loan refinancing from international banks, banking sources said. The deal would be Mobily’s largest syndicated loan since June 2007, when it signed a SR10.78 billion Shariah-compliant debt financing.

Proceeds from the new SR10 billion loan will go toward refinancing several transactions, with the majority of the financing carrying a five-year maturity. Samba Financial Group is advising, with bank approvals expected by the end of October, a Middle Eastern banker said. Mobily will accept US dollars from potential European lenders, but is not wholly dependent on international participation.

“There is plenty of liquidity in Saudi Arabia,” a European banker said. Pricing has not yet been determined, but European lenders’ dollar funding and liquidity concerns, plus downgrades to French banks’ credit ratings, means some Middle Eastern borrowers may have to consider higher margins. “Generally, borrowers will have to look at pricing and they are not so enamored with the idea,” another European banker said.

The impact on Middle Eastern borrowers however has not been severe so far, with strong investment grade and relationships expected to shield prominent borrowers from sharp margin increases, the second European banker added. Mobily last tapped the market for a SR1.2 billion Murabaha facility to expand and upgrade its network in December 2010.

Samba Financial Group, National Commercial Bank, Riyad Bank, Saudi British Bank and Banque Saudi Fransi provided that financing, which will run for 12 months and has a six-month extension option. – Arabnews