Ad

Emirates Global Aluminium commits revolving credit facility tied to the Term SOFR

Emirates Global Aluminium commits revolving credit facility tied to the Term SOFR
Ad

Emirates Global Aluminium today announced the company has agreed a revolving credit facility tied to the Term Secured Overnight Funding Rate (SOFR).

SOFR is the emerging replacement to the US dollar London Interbank Offering Rate (LIBOR), which has been the global lending benchmark for decades but has been the subject of market manipulation accusations.

EGA’s transaction is one of the first syndicated corporate credit facilities to be agreed in the Middle East with Term SOFR as the benchmark pricing, using the Chicago Mercantile Exchange SOFR forward rate. The transaction helps establish market practice for the use of Term SOFR in the region and by industrial companies worldwide.

SOFR provides a benchmark interest rate based on data from observable transactions, while LIBOR relied on disclosures from a panel of selected banks.

EGA Chief Financial Officer, Zouhir Regragui, said,

"EGA has broken new financial ground in the Middle East with this Term SOFR facility, and this is an example of how to manage the global transition to this new benchmark. The facility itself, like the one it replaces, will enable us to continue our robust and structured approach to managing our short-term working capital and liquidity position."

The new committed revolving credit facility provides EGA access to $137.5 million, with a term extended by 12 months. Participating banks include Abu Dhabi Commercial Bank, Emirates NBD, and Commercial Bank of Dubai.

In total, EGA continues to have $737.5 million of committed revolving credit facilities.

News Source: Emirates News Agency

Ad
Ad
Ad
Dark Light