Sabic Innovative Plastics plans bond for GE Plastics purchase
LONDON (MarketWatch) — Sabic Innovative Plastics Holding BV is to issue a two-part bond to fund Saudi Basic Industries Corp.’s
The senior unsecured bond offer will be denominated in euros and dollars and is to be priced following a roadshow starting Wednesday and ending next Monday.
The euro tranche will total EUR590 million and the dollar tranche $1.95 billion. Both will have a maturity of eight years and be non-callable for four years.
The bonds will also have change-of-control put option at a price of 101%.
The financing is being led by Citigroup, ABN AMRO, HSBC and JPMorgan.
Saudi Basic Industries Corp., the world’s largest petrochemicals producer by market capitalization, aims to raise $9 billion worth of debt by the end of the third quarter to finance its acquisition of the U.S. General Electric Co.’s GE plastics unit, a company official told Dow Jones Newswires in June.
Sabic Chief Financial Officer Mutlaq Morished told Dow Jones Newswires in June that the company planned to launch up to $2.3 billion worth of “traditional, not Islamic” bonds and that the bulk of the debt, 50%-55%, will come from term loan Bs, which are sold to institutional investors, and 15%-20% from term loan As, which are traditional loans.
Sabic, 70% owned by the Saudi government, said in May that it would buy GE’s plastics division for $11.6 billion as part of the company’s global expansion plans. As part of its expansion plans, Sabic last year acquired the U.K. petrochemicals business of Salt Lake City-based Huntsman Corp. (HUN) for $700 million.
The company presently produces about 47 million tons a year of products, such as chemicals, polymers and fertilizers, and almost 4 million tons a year of steel.
(Kate Haywood in London contributed to this article.)