Saudi Electricity in talks with banks for $1 bln loan

Saudi Electricity Company (SEC) is in talks with banks for a $1 billion loan, as it has sent out a request for proposals for a five-year bullet loan, Reuters reported citing sources familiar with the matter.

SEC had initially considered the bond market but decided to tap the loan market instead after bankers decided that changes to the electricity sector, as part of Saudi’s Vision 2030 that aim to diversify Saudi’s economy away from oil dependency, might make it too hard to sell to bond investors.

Last June, SEC signed a $1.5 billion five-year financing agreement with Industrial and Commercial Bank of China. In January 2016, it signed a $1.4 billion three-year revolving credit facility with a group of seven banks: MUFG, Mizuho Bank, SMBC, HSBC, JP Morgan, Credit Agricole and Deutsche Bank.

That US dollar tranche was part of a wider SAR 7.75 billion ($2.07 bln) facility that also comprised a SAR 2.5 billion tranche, which was signed in December 2015 with local lenders National Commercial Bank and Samba Financial Group, Reuters added.