EGPC Seeks LIBOR-Based Financing Egypt’s state petroleum company will pay lower margin above LIBOR than previous financing

January 9, 2010

According to Reuters, EGPC, Egyptian General Petroleum Company, is taking bids on a new round of financing with rates based on LIBOR, the London Interbank Offered Rate. LIBOR is a filtered average of rates that banks charge each other for unsecured, short-term loans.

Banks have a January 18 deadline to submit proposals on the $2 billion financing deal that could entail a pre-export syndicated loan, a bond, or a mix. Pricing on EGPC’s new financing is expected to be LIBOR plus 300 basis points, notable less than the LIBOR plus 350 basis points the company pays a $900 million pre-export loan negotiated in Q4 2009. Per the Reuters article, experts attribute EGPC’s improved LIBOR-based pricing to investors desire to diversify beyond Russian oil and Dubai real estate.

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