Tuesday, Oct 26, 2010

(This story was originally published Monday.)

RIYADH (Zawya Dow Jones)--Sabic Capital IBV, a financial division of petrochemical giant Saudi Basic Industries Corp. (2010.SA), plans to issue within days a five-year, dollar-denominated benchmark bond for general corporate purposes and to refinance debt, a top Sabic executive said Monday.

HSBC Holdings Plc, JPMorgan Chase & Co. and Royal Bank Of Scotland Group are managing the five-year bond, Mutlaq Al Morished, Sabic's chief financial officer, told Zawya Dow Jones by telephone.

The bond, which will be priced later Monday, will be listed in London, he said, but declined to say how much Sabic Capital was expected to raise from the issue.

A typical benchmark bond issue is for a minimum $500 million. Sabic Capital was established in 2008 to look after the financing and tax operations of SABIC's investments in Europe and the U.S.

In May, the unit delayed a dollar-denominated benchmark bond due to unstable market conditions.

Ratings agency Standard & Poor's Corp. in May gave the proposed issue an A+ rating saying "we understand that Sabic intends to use the proceeds to refinance external debt at its international subsidiary, SABIC Innovative Plastics (SABIC IP)."

SABIC Innovative Plastics raised $1.5 billion from a bond issue in August 2007. Sabic's bond issue is the latest in flurry of Saudi debt issues and comes at a time when Middle East debt markets are staging a return after freezing up during the global financial crisis, with several corporates issuing, and many more gearing up for, new bonds following the successful launch last month of Dubai's first sovereign bond in almost a year. Fitch Ratings rated Sabic's proposed bond an A+, the fifth-best ranking.

-By Summer Said, Dow Jones Newswires; +966-546-842373; summer.said@dowjones.com

Copyright (c) 2010 Dow Jones & Co.

(END) Dow Jones Newswires

26-10-10 0352GMT