Abu Dhabi's IPIC seeks loan of up to $5bn

International Petroleum Investment Co to use money to finance its recent buyouts - source.
By Tessa Walsh
Fri 24 Apr 2009 10:10 AM

Abu Dhabi government-owned International Petroleum Investment Co (IPIC) is raising a new loan of up to $5bn, banking sources close to the deal said on Thursday.

The loan, which will be co-ordinated by Bank of Tokyo-Mitsubishi UFJ, HSBC and Santander, will be used to finance IPIC's recent acquisitions, a banker close to the deal said.

"The loan does not finance a specific acquisition, it finances IPIC's recent acquisition spree," he added.

The three co-ordinating banks will invite senior banks to join the deal as mandated lead arrangers in the next couple of weeks, sources said.

Any shortfall between the amount raised and IPIC's $5bn debt requirement could be met by the government of Abu Dhabi, another banker said.

"IPIC's debt requirement is up to $5bn," a banker close to the deal said.

IPIC has made two large recent acquisitions. In March the company increased its stake in Spanish oil company Cepsa to 47 percent by buying shares from Santander Group and Fenosa in a deal worth around $4.4bn.

In April, Canada-based Nova Chemicals Corp shareholders approved IPIC's $500m takeover of the raw plastics manufacturer in a deal worth $2.3bn including Nova's debt.

The new loan of up to $5bn will be IPIC's second loan this year - in February the company signed a $700m, three-year deal to back its purchase of a 17.6 percent stake in Oil Search Ltd.

That loan was priced at around 300 basis points over LIBOR, banking sources said at the time. The new loan is expected to carry similarly attractive pricing to encourage banks to commit to the deal, two bankers said.

IPIC invests in oil-related projects for the government of Abu Dhabi, the capital of the United Arab Emirates, which is the world's fifth-largest oil exporter.

IPIC is currently seeking a credit rating. (Reuters)

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