The proceeds of the deal will be used to refinance credit lines signed in 2006
Saudi Arabian Oil Co, the state owned oil company known as Aramco, set initial interest margins on $4 billion of revolving credits, according to 3 people with knowledge of the situation.
Lenders will receive a margin of 13 basis points over benchmark rates on a $1 billion one year portion, and 18 basis points on a $3 billion five year part, said the people, who declined to be identified because the transaction is private. A basis point is 0.01 percentage point. Money in a revolving credit can be borrowed again once it’s been repaid.
The proceeds of the deal will be used to refinance credit lines signed in 2006, the people said. That facility has $3 billion available until 2011, according to data compiled by Bloomberg.
The financing was arranged by JPMorgan Chase & Co, BNP Paribas, HSBC Holdings and Riyad Bank and included a one-year portion that expired in 2007.
Mohammad Khazindar, a spokesman for Dharan based Saudi Aramco, wasn’t available to comment after business hours.