ADCB among dozens banks with Saudi exposure

[Salin Arub]

ADCB among dozens banks with Saudi exposure
Jun 24, 2009

Abu Dhabi Commercial Bank emerged on Wednesday as one of the most highly exposed banks to two troubled Saudi groups with at least $500 million in exposure out of $6.3 billion in loans arranged to the groups.

Saudi Arabia's Saad Group and the Algosaibi family have around $6.3 billion in syndicated loans, Reuters LPC data shows, but it is not clear how much remains on the banks' books.

Other lenders to the two groups include Citigroup, BNP Paribas, HSBC, Standard Chartered and JP Morgan, along with a host of other international and domestic banks, according to news agency Reuters data.

One banking source, who declined to be named for confidentiality reasons, said that mid-sized Gulf lender ADCB had over $500 million in exposure. "ADCB has significant exposure to the Saudi businesses," he said.

Chief executive Ala'a Eraiqat declined to comment on the nature or magnitude of any exposure but said it was mostly backed up with cash deposits held at ADCB.

"We are in close contact with them and working with their financial advisers and the rest of the lenders for a speedy resolution," Eraiqat said. "I cannot comment on the amounts or give any more details."

Privately held investment company Saad is restructuring its debt after it ran into difficulties which it has declined to specify and the Saudi central bank has frozen the accounts of its billionaire chairman, Maan al-Sanea.

Saad Group has proposed Credit Suisse as an adviser to its bank lenders, a source with knowledge of the situation said on Wednesday.

The appointment is subject to the approval of the banks, who are owed more than $6 billion, the source said.

Privately held Ahmad Hamad Al-Gosaibi & Brothers Company is also restructuring its debt.

Bankers have three current loans to the two groups. Such large loans are typically originated by large bank syndicates who can then choose to sell on parts or all of the debt into secondary markets.

One is a $2.815 billion loan to the Saad Group dated August 2007 that matures in August 2010. A second $2.75 billion loan, also to the Saad Group, was taken out in June 07 and matures in June 2012.

Ahmad Hamad Algosaibi & Bros Co borrowed $700 million in May 2007 which matures in May 2010. The group also took a $50 million murabaha deal, but that may already have matured in April 2009.