Bahrain - Alba, the world’s largest smelter ex-China, ha become the first Bahraini company to achieve sustainability-linked refinancing for its $1,247,475,000 syndicated loan facility in connection to the line 6 expansion project.
The $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 term-loan facility (the conventional facility) of $537,475,000 and a US Dollar-denominated senior Sharia-compliant facility (the Islamic facility) of $710,000,000.
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.
Commenting, Alba chairman Shaikh Daij bin Salman 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 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. Locking these new terms will allow us to invest in our future growth initiatives all the while giving back to our shareholders.
“Being the first company in Bahrain to have tied the refinancing to sustainability linked targets shows our strong commitment to ESG and will be a catalyst to make Alba’s sustainability performance stronger as we work collectively to meet Bahrain’s net zero carbon objectives by 2060.
“I also take the opportunity to thank the coordinators and underwriters for going above and beyond to effect the refinancing along with my management team in Alba.”
The new syndication was oversubscribed by $2.6 billion and comprises 21 banks.
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