denotes premium content | Jan 6 2009 
Feature
posted 23 Feb 2005 in Volume 8 Issue 4
Bapco, Bahrain: An exemplary Gulf financing
Commercial lead arrangers: Arab Banking Corporation, Arab Petroleum Investments Corporation, BNP Paribas, Gulf International Bank, HSBC Bank Middle East, Mizuho Corporate Bank, National Bank of Bahrain
Islamic lead arrangers: Arab Petroleum Investments Corporation, BNP Paribas, Dubai Islamic Bank, Gulf International Bank, HSBC Bank Middle East, Kuwait Finance House and National Bank of Bahrain
Borrower: Bahrain Petroleum Company (Bapco)
Deal size: $1bn
ECAs: JBIC & Nexi
Tenor: 11.5 years including a 3.5-year grace period
Signing: December 2004
At $1bn, this transaction marks the largest ever structured-commodity financing in the Gulf area.
The multi-tranche financing was structured around different sources of liquidity to optimise the terms of the deal. Following a strong response to the proposed structure from the commercial and Islamic banking market, the loan was extended from $650m to enable Bapco to successfully raise over $1bn, with a door-to-door maturity of 11 years and six months. The deal refinances a $150m pre-export financing facility put in place by BNP Paribas and HSBC to front interim payments.
The financing incorporates a $370m commercial facility, a $330m Islamic lease facility, and a $300m JBIC/Nexi facility. BNP Paribas and Arab Banking Corporation are commercial bookrunners and HSBC and Kuwait Finance House are Islamic bookrunners. BNP Paribas was also appointed commercial documentation agent, global agent, onshore security agent, offshore security agent, account bank and modelling Bank. HSBC and Apicorp Technical Bank are Islamic documentation agents.
On 10 November 2004, a group of international, regional and local banks were appointed for a strategic investment programme financing for the Bahrain Petroleum Company. This was achieved after BNP Paribas received a fast-track mandate to restructure the deal within a short timeframe – even though the transaction had been in the market for several years – and to obtain a significant oversubscription of the proposed financing amount without the support of a sovereign guarantee.
