Saudi Aramco has retained Citi to oversee a $2 billion loan backed by UK Export Finance (UKEF), Reuters reports.
The loan will facilitate Saudi Aramco’s purchase of goods and services from Britain, according to the news agency.
“UKEF is engaged in finalizing the operational arrangements regarding a significant finance facility with Saudi Aramco. UKEF’s support will take the form of a $2 billion guarantee on bank lending,” a British governmental spokesman told Reuters.
Citi’s commission for the service is considered modest, a source told Reuters, though no figures were released. The agreement, however, will permit the bank to develop a working relationship with Saudi Aramco.
“Banks look at these kinds of operations for relationship purposes,” an individual at a European export credit agency told Reuters. “This kind of loan is a bit of a test that Aramco makes on the market and given the name, there’s high competition among banks.
Saudi Aramco is planning a partial initial public (IPO) offering next year. Major international banks, including Citi, are eager to play a role in the IPO, Reuters previously reported.
London and New York are rumored to be among the top contenders for the primary IPO location—though other locations, such as Hong Kong and Tokyo, have also been floated.