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Aramco venture starts bond sale

DUBAI: Sadara Chemical Company, a joint venture of Saudi Aramco and Dow Chemical, launched an Islamic bond sale that could raise at least $1.4 billion to finance a large petrochemical complex in the east of the kingdom.

The $19.3bn facility, located at Jubail Industrial City in Saudi Arabia's Eastern Province, will be the world's largest chemical complex ever built in a single phase.

Sadara may increase the size of the planned sukuk to $2.5bn depending on market demand, it said in a prospectus for the sale, adding if the company raises more than $1.4bn other sources of financing will be adjusted accordingly.

Pricing of the sukuk, which is only available to Saudi investors, will be determined once road shows have taken place. The sukuk has a 16-year lifespan, the company said in a statement.

The sukuk forms part of a $12.5bn debt package currently being raised to fund the construction of the project, which will produce more than three million tonnes of petrochemicals each year when completed in 2016. Of the total, $4.975 billion has been provided by the US Export-Import Bank.

Deutsche Bank, Riyad Bank, Alinma Bank and Bank Al Bilad have been mandated to arrange the sukuk, the statement said.

Once sold, it will be only the second project finance sukuk ever sold in Saudi Arabia - the first was the 3.75bn riyals issue in October 2011 from Saudi Aramco Total Refining and Petrochemical Company.



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