Sumitomo Mitsui Banking Corporation – Oil refinery refinancing in Saudi Arabia
Yanbu Aramco Sinopec Refining Company Limited (YASREF) is a joint venture formed between Saudi Aramco and Sinopec in 2012. YASREF developed a 400,000-barrels-per-day oil refinery in Yanbu, Saudi Arabia. The YASREF joint venture is another successful cooperation between Saudi Aramco and Sinopec after building a plant in Fujian Province of China in 2009. It is also the first refining project that Sinopec completed outside of China.
YASREF refinery was initially funded by shareholder loans. After reaching successful project completion in July 2015, YASREF sponsors approached the market to refinance the shareholder loans with commercial debt in January 2016.
A total of USD$4.7 billion facilities were raised, comprising a seven-year USD$3.1 billion Term Loan and a SAR 6 billion Murabaha facility. The facilities were oversubscribed and signed in April 2016. A total of 26 international and local banks participated in the facilities.
SMBC was appointed as Lead Coordinator, Bookrunner, Mandated Lead Arranger and Documentation Bank for the USD facility. SMBC Hong Kong branch contributed to the success of this transaction from a loan syndication perspective. SMBC syndication team based in Hong Kong actively coordinated with other Hong Kong based banks to make this multi-billion dollar refinancing happens under a short 4-month timeframe. This successful Hong Kong-driven syndication process illustrates the highly liquid, reactive and sophisticated Hong Kong banking market available for large infrastructure deals in Belt and Road countries.