DUBAI- State-controlled utility Saudi Electricity Co has recently discussed with a group of international banks its plan to issue a U.S. dollar-denominated bond, sources familiar with the matter said.
The company is looking to refinance a $2.6 billion bridge syndicated loan it raised in January and was aiming to issue the debt securities already this month, depending on market conditions.
Saudi Electricity, which did not immediately respond to requests for comment, raised the bridge loan for general corporate purposes and to back its capital expenditure programme, it said in January.
That loan, with a one-year maturity, was provided by Citibank, MUFG, First Abu Dhabi Bank, HSBC, Mizuho Bank, Natixis, Sumitomo Mitsui Banking Corporation and Standard Chartered Bank.
"Almost" the same group of banks would be involved in the planned bond issue, said one of the sources directly involved in the talks.
Should market conditions not improve the debt sale could be delayed to September, said the sources.
The last significant international bond sale in the Gulf was a $500 million bond by Qatar's Commercial Bank in May.
Since then, potential issuers in the region have held their plans because of market volatility and the price premium they would have to pay to attract demand.
The Saudi Electricity deal could replace the total amount of the bridge loan, although the final size will also depend on pricing terms, said the sources.
As part of wider reforms in the Saudi energy sector, Saudi Arabia plans to restructure the utility splitting it into four separate units to improve its efficiency.
(Editing by Alexandra Hudson) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: firstname.lastname@example.org))