DUBAI/RIYADH, June 5 (Reuters) – Saudi Basic Industries Corp (SABIC) is in talks with banks for a potential U.S. dollar-denominated bond, banking sources familiar with the matter said.
SABIC, the world’s fourth-largest petrochemicals company, bought in a 25 percent stake in the Swiss specialty chemicals group Clariant in January, becoming the firm’s largest shareholder.
CEO Yousef al-Benyan said at the time that SABIC could self-finance the Clariant stake acquisition, but did not exclude the possibility of inviting banks to part-finance the deal.
The company raised earlier this year a $3 billion bridge loan. Banking sources, who believe the loan was raised to partially finance the acquisition, said the new bond is likely to replace that facility.
SABIC did not immediately respond to a request for comment on the bond plans.
The loan was arranged by a group of banks including BNP Paribas, Citi, MUFG and Standard Chartered. The same banks are expected to lead the new bond deal, but the company has started sounding out other lenders over the past week or so, said one of the sources.
A second banker said HSBC has been mandated to arrange the upcoming transaction. HSBC declined to comment.
In April, SABIC’s said the company had more than 27 billion riyals ($7.20 billion) of debt due to mature this year and that options to raise financing through bonds or other instruments were available.
Boosted by the rise in oil prices, SABIC is studying opportunities to access the African market and is also looking at acquisitions in the United States, Europe, and China, its chief executive said at the time, adding that some of the deals could materialize already this year.
SABIC has a $1 billion bond maturing in October this year which was raised in 2013 through its unit SABIC Capital. The same unit raised a $1 billion term loan in 2013 which is due in July this year.
That loan was arranged by a group including Bank of America Merrill Lynch, Citigroup, Credit Agricole CIB, Deutsche Bank, HSBC, ING, JP Morgan, Mizuho, MUFG, Royal Bank of Scotland, Standard Chartered, and SMBC. ($1 = 3.7502 riyals) (Editing by Louise Heavens)