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APICORP raises SR2.5bn from four Saudi banks

DAMMAM: Arab Petroleum Investments Corporation (APICORP) said it has successfully closed a three-year SR2.5 billion ($667 million) syndicated Shariah-compliant facility from four leading Saudi Arabian banks on competitive market terms.

The facility, which is APICORP's debut syndicated Shariah-compliant financing, is aimed at retaining and increasing its medium term funding.

APICORP is the multilateral development bank of the 10 member states of the Organization of Arab Petroleum Exporting Countries (OAPEC). The government of Saudi Arabia owns a 17 percent stake in it.

Leading Saudi banks Riyad Bank , Al-Rajhi Bank, Banque Saudi Fransi and The Saudi British Bank act as the mandated lead arrangers for the facility, while Riyad Bank will perform the role of Murabaha Facility Agent.

The term financing was oversubscribed by the mandated lead arrangers.

Ahmad bin Hamad Al-Nuaimi, chief executive and general Mmanager of APICORP, said: "We are pleased to announce the success of this transaction -- a continuation of APICORP's strategy to significantly strengthen its balance sheet; a strategy first announced in October 2010 when APICORP debuted its three times oversubscribed SR2 billion bond."

In a strong endorsement of its performance from member states in May 2011, APICORP doubled its authorized capital to $2.4 billion, increased its paid up capital by 36 percent to $750 million, and increased its subscribed capital by 173 percent to $1.5 billion.

"The result is that our strategy continues to allow APICORP to better carry out its mandate in what we expect will be a challenging global economic environment in 2012. Equally as important, the strategy will help APICORP withstand potential sudden shocks in the global financial system."

APICORP plays a vital role in fostering the development of the Arab energy industry.

Over the last 36 years, APICORP has invested as an equity owner in a total of 22 oil and gas joint venture projects worth in excess of $13 billion.

At the same time, APICORP has participated in direct and syndicated energy finance transactions worth in excess of $130 billion. APICORP's aggregate commitments in these transactions, including both in equity and debt, are valued in excess of $11 billion.

Al-Nuaimi added: "Today's transaction is testimony to the confidence of the banking community in APICORP's financial stability despite what continues to be a risk-averse lending environment."

APICORP's strong credit position, A1 for long term and Prime 1 for short term, was recently reaffirmed by Moody's Investors Services' with a stable outlook.

"APICORP's robust capitalization and strong liquidity profile is backed by strong and conservative banking fundamentals," Al-Nuaimi added.

© Arab News 2012