Industry, Logistics & Shipping

Alba refinances $1.5bn Line 6 expansion syndicated loan

Aluminium Bahrain (Alba), the world’s largest smelter excluding China, has announced the successful refinancing of its $1.5-billion syndicated loan facility in connection with its ambitious Line 6 expansion project.

The new senior-unsecured syndicated loan facility carries an interest margin of 300 basis points per annum over the London Interbank Offered Rate (Libor).

This new facility has an 8-year tenor and the principal amount will be repaid in 16 semi-annual instalments and includes 6-month grace period.

This facility comprises two tranches: a US dollar-denominated senior unsecured conventional term-loan facility (the Conventional Facility) of $590.3 million and a US dollar-denominated senior shari’ah-compliant facility (the Islamic Facility) of $909.7 million.

Arab Banking Corporation (Bank ABC), Gulf International Bank (GIB) and National Bank of Bahrain (NBB) were the co-ordinators and underwriters of this transaction.

Lauding the achievement, Chairman Shaikh Daij bin Salman bin Daij Al Khalifa said: "We are very pleased with the outcomes of the refinancing of $1.5 billion as it is a major step in improving Alba’s capital structure and for that, I am very proud of my team led by the acting CEO Ali Al Baqali for successfully executing this transaction in collaboration with our co-ordinators and underwriters."

"With this refinancing, we have managed not only to reduce our interest margin from 325 basis points over Libor to 300 basis points over Libor – a significant milestone amidst a volatile market but also relieve our cash-flow by extending the maturity of the syndication to an 8-year period as well as provide covenant reliefs," stated Shaikh Daij.

"This clearly is a vote of confidence for Alba and its game-changer, Line 6 Expansion Project, and for Bahrain," he added. The new syndication comprises 23 banks.

Bank ABC’s Group CEO Dr Khaled Kawan said: "Bank ABC is honoured to have been entrusted by Alba to act as co-ordinator and bookrunner for their $1.5 billion refinancing of the Line 6 Expansion Project. The success of the transaction is a testament to Alba’s standing as the preeminent industry flagship of Bahrain."

"We are certainly pleased with the significant oversubscription achieved during general syndication, with a diverse set of conventional and Islamic banks joining the facility. Bank ABC is proud of its association with a renowned world industry leader such as Alba," he stated.

GIB Group CEO Abdulaziz Al Helaissi said: "GIB is very proud to have coordinated, underwritten and syndicated Alba’s successfully refinancing at highly competitive terms. This transaction reflects the trust and support of the banking sector in Alba and the Line 6 Expansion Project."

"It is also a positive indication of the Kingdom of Bahrain’s future prospects with demand for the transaction significantly exceeding the refinancing amount," stated Al Helaissi.

National Bank of Bahrain CEO Jean Christophe Durand said: "The overwhelming response to this transaction is a testimony to the ability of Alba to attract liquidity for appropriately structured transactions with strong underlying fundamentals."

"Moreover, the transaction was able to garner interest from new financiers who were not part of the original financing, resulting in a healthy oversubscription. Being the national bank of the Kingdom, NBB takes pride in being associated with strategically important transactions for the country and was, therefore, delighted to support Alba on this landmark transaction," he added.-TradeArabia News Service