HSBC has signed a USD 435 million long term facility to finance a steel plant and rolling mill supplied by Danieli - one of the world's top three steel plant suppliers - to Hadeed, a wholly-owned subsidiary of SABIC, the world's largest petrochemical company by market capitalisation, profits and total assets and the largest listed company in the Gulf Cooperation Countries market.
The new plant, located in Jubail in the Eastern Province of the Kingdom of Saudi Arabia, will produce one million tons per year of pellets and half a million tons of rebar. With a total production capacity of six million tons, Hadeed will now be able to use their rolling mills at full capacity without relying on imported steel. Production from the new steel plant is expected to commence in the second half of 2012.
This long term financing is insured by the Italian Government's Export Credit Agency (ECA) SACE. SACE's primary role is to enhance Italian companies' competitiveness abroad. HSBC arranged more ECA backed loans than any bank in the Middle East in 2010, according to data provider Dealogic.
Olivier Khalife, who led the deal in HSBC's project and export finance team, said: "Steel consumption in KSA has rapidly surged over the past few years on the back of a construction boom and growing investment in infrastructure. With this new Danieli equipment, Hadeed, which is the largest steel maker in the MENA region will be able to provide the KSA and the wider region with very high specification wire-rod products which will domestically meet the needs of ongoing and planned projects."
"This major SACE-supported financing in the Kingdom emphasises yet again the continued importance and attraction of long term ECA finance to GCC borrowers for the financing of significant capital expenditure. This deal comes after the USD 500 million Emirates Steel International financing in Abu Dhabi where HSBC also acted as sole SACE facility arranger and agent in July last year. SABIC has a long experience with export credit agencies however this is SABIC's first ever direct corporate ECA financing and the facility was tailor-made to perfectly match our client's expectations."
Key facts on HSBC's Global Banking and Markets business in the MENA region:
- 15 dealing rooms across the region - including a recently created Abu Dhabi dealing room
- A leading arranger of bonds and loans for over a decade
- Leading the Bloomberg underwriter league tables in the MENA region:
- #1 MENA Region Bonds
- #1 Middle East Issuer Bonds
- #1 GCC Issuer Bonds
- #1 International Sukuk
- #1 GCC Islamic Bonds
- #1 MENA Loans Mandated Arranger
(source: Bloomberg, 1st three quarters 2010 MENA Capital Markets League tables)
- Award winning:
Credit Awards 2010
- Best Bank for Islamic Finance
Euromoney Awards for Excellence 2010
- Best Global Emerging Markets Bank
- Best Global Emerging Markets Debt House
- Best Global Sovereign Advisory House
- Best Investment Bank in the Middle East
- Best Investment Bank in Saudi Arabia
EuroWeek Bond Market Awards 2010
- Most Impressive Bank advising Middle Eastern clients
Euromoney Islamic Finance Awards 2010
- Sukuk House of the Year (for the second year running)
- Best International Islamic Bank
- Most Innovative Deal - Global Investment House Restructuring
The Banker Deals of the Year 2010
- Restructuring : Restructuring of Global Investment House USD2bn debt
- Corporate Bonds: TAQA's USD1.5bn dual tranche bond
- Infrastructure and Project Finance:
- Shuweihat's USD2.1bn financing of a water and power project
-Ends-
HSBC in the Middle East
HSBC is the largest and most widely represented international bank in the Middle East. HSBC Bank Middle East Limited has 53 branches throughout the United Arab Emirates, Oman, Bahrain, Qatar, Kuwait, Jordan, Lebanon, Pakistan, Algeria and the Palestinian Autonomous Area. In addition to the branch network HSBC maintains a representative office in Tripoli, Libya. This extensive regional coverage is strengthened by HSBC Bank Egypt SAE; HSBC Saudi Arabia Limited; SABB Securities Limited; SABB Takaful Co.; and Dar Es Saalam Investment Bank.
Charles Clarke
Senior Manager, Corporate Communications
Global Banking and Markets and HSBC Amanah
HSBC Bank Middle East Limited
Tel: 971 4423 5640
Email: charleswclarke@hsbc.com
© Press Release 2011
