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DEBT REFINANCE

Kingdom Holding plans up to $500m loan

Dubai, October 7, 2012

Saudi Arabia's Kingdom Holding , the investment vehicle of Prince Alwaleed bin Talal, is planning to raise up to $500 million from a syndicated loan, with the proceeds largely to refinance existing debt, three banking sources said.

Kingdom, which has minority stakes in some of the world's top companies including Citigroup Inc, had initially planned a bond issue, but decided to go for the loan instead, one of the sources familiar with the matter said.

In June, sources told Reuters the investment firm had hired Deutsche Bank and Banque Saudi Fransi for its maiden debt issue in the local bond market.

"The bond issue plan was definitely on and Kingdom had sought out a rating to proceed with it but the plan was shelved later and they have now decided to go for the loan," a banking source familiar with the matter said, declining to elaborate.

"Most of it will be used to refinance existing debt."

The loan facility was expected to have a tenure of three years, a second banking source said.

Kingdom Holding was not immediately available for comment. An email sent to the investment firm seeking comment was unanswered. The sources did not want to be named as the matter has not been made public.

The investment firm has hired a number of local and international banks including, J.P. Morgan Chase Inc, Deutsche Bank, Citigroup Inc, HSBC Holdings, Standard Chartered, Royal Bank of Scotland, Samba Financial Group, Banque Saudi Fransi and Saudi British Bank for the loan facility, the sources said.

Historically-low interest rates and plentiful liquidity in the local bank market have assisted Middle Eastern companies to refinance obligations, either in the loan or bond markets, allowing them to lock in competitive financing rates.

Kingdom raised $800 million from a syndicated loan in 2008, according to Reuters data. The investment firm is 95-percent owned by Prince Alwaleed, a nephew of Saudi Arabia's king and a billionaire thought to be worth about $20 billion.

Through his investment vehicle, Alwaleed also owns stakes in Rupert Murdoch's News Corp and microblogging site Twitter.

Kingdom said in July its second-quarter net profit rose 9.4 percent as the value of its investments increased during the period. – Reuters




Tags: Saudi Arabia | banks | Kingdom Holding | loan |

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