The kingdom’s Ministry of Finance has appointed Industrial & Commercial Bank of China Ltd. as coordinator and bookrunner for the long-term senior, unsecured loan, according to people familiar with the matter. The 10-year debt is offering an interest rate of 100 basis points over the Secured Overnight Financing Rate — the usual reference rate when borrowing in dollars, the people said, asking not to be identified because the matter is private.
While part of that will be funded by oil revenue, the government also needs to attract foreign investment and borrow. Many key bodies investing in Vision 2030 projects, including the Public Investment Fund and its subsidiaries developing the new city of Neom, have already borrowed tens of billions of dollars.
A deal by the kingdom would boost EMEA’s syndicated loan market, which has suffered a 27% drop year-to-date, according to Bloomberg data. It also highlights the increasing use of Chinese lenders in the Middle East. The rankings of major Chinese banks such as Bank of China and ICBC have risen in league tables of loan arrangers every year since the pandemic, according to the data.