October 10, 2017 / 1:58 PM / 9 months ago

Oman's Electricity Holding to raise two loans as part of $2 bln capex programme - sources

DUBAI, Oct 10 (Reuters) - Oman’s state-owned Electricity Holding Co. (EHC) is set to complete the syndication of a $165 million loan for one of its distribution companies, and has started marketing a loan of around $200 million for a second subsidiary, sources familiar with the matter said on Tuesday.

The loans, part of a $2 billion capital expenditure programme for the country’s distribution and transmission network, are the latest international fundraising exercises by Oman, which has borrowed more than $10 billion through international bonds and loans this year as it seeks to refill budget coffers hit by low oil prices.

EHC, which holds the Omani government’s stake in nine electricity firms, is working with Bank Muscat and JP Morgan to raise the financing, said the sources.

The $165 million loan, with a maturity of just over 10 years, is being raised for the Majan Electricity Company. The loan syndication is completed and documentation should be finalised over the next few weeks, said the sources.

The second facility, for the Muscat Electricity Distribution Company, will be in the region of $200 million and has just been launched to syndication, said the sources. The facility will have the same tenor as the Majan loan.

Both the loans pay a margin of over 300 basis points over the London Interbank Offered Rate (LIBOR), one source said.

EHC did not respond to a request for comment.

Bank Muscat and JP Morgan have been mandated to arrange the debt financing – consisting of a combination of bonds and loans – for a total of six subsidiaries of Oman’s Electricity Holding Company to be completed between 2017 and 2018.

The banks have arranged a $500 million 10-year bond for Oman Electricity Transmission Company in May. This means that in addition to the Majan loan and the loan for the Muscat distribution subsidiary, three more of EHC’s subsidiaries will need debt funding.

The split between bonds and loans for EHC’s remaining debt requirements have yet to be determined, as well as the exact time of the transactions, one source close to the matter said.

Reporting by Davide Barbuscia, editing by Louise Heavens

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