Manama, April 27 (BNA): Aluminum Bahrain B.S.C. (Alba), the world’s largest smelter outside of China, is the first Bahraini company to successfully achieve a sustainability-related refinancing of a $1,247,475,000 syndication facility in connection with Line Six. expansion project.
The $1,247,475,000 conventional Islamic facility carries an interest margin of 235 basis points per annum on the sum of the secured overnight financing rate (SOFR) and credit settlement difference (CAS). This new facility has a term of 8 years and the principal amount will be repaid in 16 semi-annual installments. Margin is subject to adjustment (up or down) on an annual basis by a total amount of up to 2.5 basis points linked to three sustainability-related KPIs: total waste recycled (solid waste), hours of training, lost time injury and the number of frequency accidents. This facility consists of two tranches: a US dollar unsecured main conventional loan facility (the Conventional Facility) of $537,475,000 and a Shariah-compliant US dollar facility (the Islamic Facility) of $710,000,000.
The Arab Banking Corporation B.S.C. (Bank ABC) and Gulf International Bank B.S.C. (GIB) and National Bank of Bahrain B.S.C. Coordinators.
Commenting on the occasion, Alba Chairman Sheikh Daij bin Salman bin Daij Al Khalifa said:
“Increasing the underwriting of our existing syndication facility 3 times is a vote of confidence in Alba, its fundamentals and the Kingdom of Bahrain. We are also pleased with the favorable terms of our new syndicated loan facility as we have reduced the interest margin from 300 basis points above LIBOR to 235 points A basis above SOFR and CAS. Locking these new terms will allow us to invest in our future growth initiatives while giving back to our shareholders.
Being the first company in Bahrain to link refinancing to sustainability-related goals, this demonstrates our strong commitment to ESG standards and will be a catalyst for making Alba’s sustainability performance even stronger as we work collectively to achieve Bahrain’s carbon-neutral goals by 2060.
I also take this opportunity to thank the coordinators and underwriters for their efforts to implement the refinancing along with my management team at Alba.”
Bank ABC Group CEO, Dr. Khaled Kwan stated:
“Bank ABC is honored to have been commissioned by Alba to act as joint coordinator, IMLAB and underwriter for their first sustainability related facility. This high profile transaction exemplifies our role as a catalyst in accelerating the environmental transformation of our local market.
We are leveraging the strength of our scale and capital markets to mobilize the financing that Alba needs to meet these global challenges and opportunities. The positive response these facilities have received in terms of increased underwriting, pricing, and the number and diversity of participants, is in fact a testament to Alba’s outstanding credentials and confidence in Bahrain’s economy.”
Jamal Al-Kishi, CEO of Gulf International Bank, said:
“We are delighted to have the opportunity to support Alba in this refinancing, which underscores the company’s commitment to sustainable development and growth. Investors who have already accepted the offer have already expressed a strong vote of confidence in Alba and its future, and equally importantly emphasized their strong appetite for ESG exposures. GIB itself recently became the first Bahrain-based bank and the first majority-owned Saudi bank to issue a sustainably linked syndicated loan. Helping our customers in the region with solutions that aim to achieve world-class sustainability goals is our primary focus.”
“The National Bank of Bahrain is pleased to have been appointed as Joint Sustainability Coordinator, Lead Arranger for the Initial Authorization and Bookrunner for the Alba Sustainability Related Facility. We are also pleased to see that the transaction met all of the goals set by Alba at the start of the mandate and, at the same time, attracted a significant increase in underwriting from a wide range of lenders. The fact that this financing brings together Alba and National Bank of Bahrain, the Bahrain Bourse’s first and second ESG rated companies, respectively (according to rating agency ESG Invest) is a testament to the sustainability drive within the Kingdom. Hisham Al Kurdi, CEO – Institutional and Investment Banking at the National Bank of Bahrain, said, “As a national enabler, we are proud to be involved in promoting the Kingdom’s 2030 economic vision.
The joint subscription has exceeded $2.6 billion and includes 21 banks.
AOQ