ADNOC picks banks for planned loan

DUBAI: Abu Dhabi National Oil Company (ADNOC) has picked an initial group of banks to arrange a planned syndicated loan of up to $5 billion, banking sources familiar with the matter said on Thursday.

Bank of Tokyo-Mitsubishi UFJ, First Abu Dhabi Bank, HSBC, and JPMorgan have a lead role in the deal, said the sources. The four banks declined to comment, while ADNOC was not immediately available to comment.

Other banks have been approached by the company and are discussing their potential participation in the transaction. Banks have been asked to join the deal and provide sums ranging between $500 million and $750 million, two bankers said.

The jumbo loan transaction, expected to have multiple tranches with maturities of up to five years, is one of a number of fundraisings that the United Arab Emirates oil giant is considering to finance its expansion.

The state-owned company, which manages almost all of the proven oil reserves in the UAE, is also discussing with banks the possibility of issuing a bond of up to $3 billion, bankers told Reuters this week. It would be ADNOC’s first public debt transaction.

ADNOC, along with other government-owned oil companies in the Gulf Cooperation Council, is turning to the debt markets as low international oil prices have put pressure on government finances in the region.  The Abu Dhabi oil major is also working on an initial public offer of shares in ADNOC Distribution, its fuel retail unit, which could raise up to $2 billion, sources told Reuters last week.