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A unit of Saudi Arabia's Saad Group, owned by the second largest shareholder of HSBC, has taken a $2.82 billion loan to refinance debt, one of the bankers arranging the transaction said on Sunday.
Saad Investment is part of a group headed by Saudi billionaire Maan Al-Sanea, the Middle East's sixth richest person, according to Forbes magazine.
Sanea used Saad Investment to buy a 5% stake in buyout firm 3i Quoted Private Equity late last month. He also invested 3.3 billion pounds ($6.67 billion) in HSBC in April becoming the second-biggest shareholder in Europe's biggest bank.
The money will be used to refinance debt and for general funding purposes, according to the banker, who declined to be identified.
The five-year revolving facility will be initially priced at 80 basis points above the London Interbank Offered Rate (Libor), with pricing reviewed every six months.
At its cheapest, the loan would be priced at 55 basis points over the London Libor if Saad Investment was rated 'A+' by ratings agency Standard & Poor's or 'A1' by Moody's at the end of each six month period.
At the top end, pricing would be 110 basis points over Libor if it was to be rated 'BBB-' by S&P or 'BAA3' by Moody's.
Moody's rating on the firm is 'BAA1', the agency said, while S&P gave it a 'BBB+' rating last week.
Standard Chartered, Barclays, BNP Paribas, Calyon, Citibank, JP Morgan and Mizuho are among the arranging banks, the banking source said.
