Saudi Aramco Desperate for Loans

Saudi Aramco Desperate for Loans

Informed sources, on condition of anonymity, told Reuters that Saudi Aramco is talking to banks about raising a $5b loan to help out a refinery it built in collaboration with China’s Sinopec.

The finances, if raised, will be used to replace some of the capital Aramco invested to build the 400,000 b/d refinery at Yanbu, which can then be deployed in other projects.

According to the invitation sent to a group of local and international lenders, Aramco wants to borrow the $5b for ten years, the sources said, adding that this information was not open to the public.

One source, an infrastructure banker, explained that the pricing of the loan was set at an extremely aggressive rate, inclusive of margin and fees, to be “double digits in all”.

Aramco has been cutting projects because of the oil price-revenues squeeze, with the Saudi government issuing Islamic bonds to fund other projects.

There was no sign of prices going up any time soon, according to the Wall Street Journal, since Aramco had recently cut the official selling price for its light, medium and heavy crude grades loading in October to Asian customers.

Light and heavy grades had been cut by 60 cents, medium cut by 50 cents; extra light remained unchanged while super light prices increased but only by 10 cents.

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