Alba Refinances US$1.5 Billion Loan Facility Funding Line 6 Expansion Project

Alba Refinances US$1.5 Billion Loan Facility Funding Line 6 Expansion Project

Aluminium Bahrain B.S.C. announced yesterday the successful refinancing of a US$1.5 billion syndicated loan facility that the firm has been using to fund the Line 6 Expansion Project.

Per the firm, the new terms of the facility give it an 8-year tenor with 16 semi-annual payments and a 6-month grace period for each payment. The facility features an interest margin of 300 basis points per annum over the London Interbank Offered Rate (LIBOR) and will be paid out in two tranches – a US Dollar-denominated senior unsecured conventional term-loan facility of US$590.3 million, and a US Dollar-denominated senior Shari’ah-compliant facility of US$909.7 million.

“We are very pleased with the outcomes of the refinancing of US$1.5 billion as it is a major step in improving Alba’s capital structure and for that, I am very proud of my team led by the Acting CEO Ali Al Baqali for successfully executing this transaction in collaboration with our Coordinators and Underwriters,” said Alba’s Chairman of the Board of Directors Shaikh Daij bin Salman bin Daij Al Khalifa. “With this refinancing, we have managed not only to reduce our interest margin from 325 basis points over LIBOR to 300 basis points over LIBOR – a significant milestone amidst a volatile market but also relieve our cash-flow by extending the maturity of the syndication to an 8-year period as well as provide covenant reliefs. This clearly is a vote of confidence for Alba and its game-changer, Line 6 Expansion Project, and for Bahrain.”

Bank ABC’s Group Chief Executive Officer Dr. Khaled Kawan said the transaction was a vote of confidence for Alba’s position in Bahrain’s economy.

“Bank ABC is honoured to have been entrusted by Alba to act as Coordinator and Bookrunner for their US$1.5 billion refinancing of the Line 6 Expansion Project. The success of the transaction is a testament to Alba’s standing as the preeminent industry flagship of Bahrain. We are certainly pleased with the significant oversubscription achieved during general syndication, with a diverse set of conventional and Islamic banks joining the facility. Bank ABC is proud of its association with a renowned world industry leader such as Alba.”

Coordinators and underwriters for the new facility were Arab Banking Corporation B.S.C. (Bank ABC), Gulf International Bank B.S.C. (GIB) and National Bank of Bahrain (NBB).

Alba is one of the largest industrial companies in the Middle East and is one of the top 10 largest aluminium producers in the world. Originally incorporated in 1968, the company is based in Bahrain and 84% of its total workforce are Bahraini nationals. It began operations in 1971 with a 120,000 metric ton annual capacity. Modernization bumped the output up to 450,000 metric tons in 1992. In the spring of 2005, Alba opened Line 5, raising output by 860,000 metric tons per year. In 2018 Alba’s smelter produced 1,011,101 metric tons of primary aluminium.