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Ipic looks to refinance $850 million loan

London, February 9, 2012

Abu Dhabi-based International Petroleum Investment Co (Ipic) has approached banks to refinance its $850 million syndicated loan from 2009, and the new deal is expected to establish a much-needed pricing benchmark for the region, bankers said.

Ipic -- one of the region's most high profile and most prolific loan borrowers -- is expected to suffer a price hike on its new deal as international lenders continue to face stretched liquidity, and European lenders grapple with sourcing US dollars, the bankers said.

Nevertheless, Ipic has taken a tough stance on pricing in its opening negotiations with lenders, they added. "Ipic is targeting very aggressive pricing - they won't get what they are asking for," one European banker said.

Alternatively, Ipic could repay the loan and get funds from another source, the banker added.

Ipic was not immediately available for comment.

Loan activity among Gulf-based firms has been scarce since the peak of the market in 2007. In 2011, companies in the Gulf raised just $15 billion in loans, compared with $30 billion in 2010 and $114.7 billion in 2007, according to Thomson Reuters LPC data.

Ipic's $850 million, three-year loan was signed in February 2009 with a 300 basis points (bps) margin. The margin dropped sharply to 50 bps on the company's last loan, a $1.5 billion, one-year bridge facility signed in June last year, though this was a special case that bankers stress will not be repeated.

The 2009 deal, used to purchase a 17.6 per cent stake in Oil Search, was signed with mandated arrangers Abu Dhabi Commercial Bank, Credit Agricole, Deutsche Bank, First Gulf Bank, Natixis and RBS.

Ipic is rated AA by Standard and Poor's and Aa3 by Moody's. – Reuters

Tags: abu dhabi | loan | IPIC | petroleum | Bankers | refinancing |

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