Debut Murabaha Facility Oversubscribed; Leading Saudi Banks Act as Mandated Lead Arrangers
KSA/Bahrain, 13 February, 2012: Arab Petroleum Investments Corporation (APICORP), the multilateral development bank of the ten member states of the Organization of Arab Petroleum Exporting Countries (OAPEC), today announced it has successfully closed a three-year SAR 2.5 billion (US$ 667 million) syndicated Shari’ah-compliant facility from four leading Saudi Arabian banks on competitive market terms. The facility, which is APICORP’s debut syndicated Shari’ah-compliant financing, is aimed at retaining and increasing its medium term funding.
Leading Saudi banks Riyad Bank, Al Rajhi Bank, Banque Saudi Fransi and The Saudi British Bank act as the Mandated Lead Arrangers for the facility, while Riyad Bank will perform the role of Murabaha Facility Agent. The term financing was oversubscribed by the Mandated Lead Arrangers.
Ahmad Bin Hamad Al Nuaimi, Chief Executive and General Manager of APICORP said: “We are pleased to announce the success of this transaction- – a continuation of APICORP’s strategy to significantly strengthen its balance sheet; a strategy first announced in October 2010 when APICORP debuted its three times oversubscribed Saudi Arabian Riyal 2 billion bond.”
In a strong endorsement of its performance from member states in May 2011, APICORP doubled its authorized capital to $2.4 billion, increased its paid up capital by 36% to $750 million, and increased its subscribed capital by 173% to $1.5 billion. “The result is that our strategy continues to allow APICORP to better carry out its mandate in what we expect will be a challenging global economic environment in 2012. Equally as important, the strategy will help APICORP withstand potential sudden shocks in the global financial system.”
Since its founding in 1975, APICORP has played a vital role in fostering the development of the Arab energy industry. Over the last 36 years, APICORP has invested as an equity owner in a total of 22 oil and gas joint venture projects worth in excess of $13 billion. At the same time, APICORP has participated in direct and syndicated energy finance transactions worth in excess of US$130 billion. APICORP’s aggregate commitments in these transactions, including both in equity and debt, are valued in excess of $11 billion.
Al Nuaimi further stated, “Today’s transaction is testimony to the confidence of the banking community in APICORP’s financial stability despite what continues to be a risk-averse lending environment.” APICORP’s strong credit position, A1 for long term and Prime 1 for short term, was recently reaffirmed by Moody’s Investors Services’ with a stable outlook. “APICORP’s robust capitalization and strong liquidity profile is backed by strong and conservative banking fundamentals,” Al Nuaimi added.
APICORP’s capital adequacy, after covering callable capital approved in May 2011, is 51%, one of the highest amongst banks in the Middle East and North Africa region. The Corporation also boasts the lowest leverage ratio amongst MENA banks – 1:2.75. APICORP fourth quarter results for 2011, announced earlier this year, saw profits growing 86% from Q4 2010 to over US$57.5 million.