Japan lender tests support for $1.5bn Saudi Energy loan

Japan’s Sumitomo Mitsui Banking Corporation (SMBC) is reportedly seeking reconfirmation from Asian banks on their backing of the $1.5 billion credit facility for Saudi Energy Company following the Iran war.

SMBC had started marketing the syndicated facility for Saudi Energy (formerly Saudi Electricity Co) just before the war began, with a focus on Asian banks, Bloomberg reported, citing unidentified sources.

The deadline for commitments is by the end of March, but can be extended, the report said, adding that the response from the banks was not known.

However, SMBC will have to back a significant portion of the loan if other banks’ participation falls short, which would weigh on its balance sheet.

Bloomberg reported many Chinese institutions have already reduced their exposure to the region since the US-Israel and Iran conflict began on February 28.  

This month, the Saudi Energy board recommended a cash dividend of $773 million for 2025, following a 15 percent increase in annual revenue to SAR102 billion.

The company’s share price closed nearly 3 percent higher at SAR14.95 on Monday, but is down 6.4 percent since the start of the year.

The Public Investment Fund owns 74.31 percent of Saudi Energy.

Further reading:

• S&P issues warning on Gulf bank deposits ‘if war persists’
• Saudi Energy board proposes $773m dividend for 2025
• UAE raises $300m from first T-bond after start of regional conflict