The proposed private credit deal would carry a tenor of up to 10 years and feature high single-digit pricing. — Bloomberg
KUALA LUMPUR: Energy company ChemOne Holdings Pte is seeking a US$600mil (RM2.5bil) private credit loan to support the construction of its chemical processing complex in Malaysia, according to people familiar with the matter.
The proposed private credit deal would carry a tenor of up to 10 years and feature high single-digit pricing, the people said, who asked not to be identified discussing private matters.
Several South Korean institutional investors have committed around US$150mil to the deal, said one of the people.
A representative from ChemOne declined to comment.
The deal reflects the growing global trend of using private credit for project financing.
In the United States, state and local infrastructure projects increasingly rely on alternative funding sources as pandemic-era stimulus fades and the Trump administration aims to reduce spending.
In Asia, borrowers are also tapping the asset class to fund developments such as data centres and electric vehicle charging stations.
The private loan will be subordinated to an existing US$3.5bil senior debt facility that was launched at the end of last year, and is now fully subscribed, the people said.
Both financings are intended to fund the development of the Pengerang Energy Complex in the southern state of Johor.
The project is designed to be a key component of a major oil, gas and petrochemical hub strategically positioned near international shipping lanes. Its deep-water access accommodates the world’s largest crude carriers.
The low carbon facility is expected to produce 5.6 million tonnes annually of aromatic and energy products, according to a press release.
Lenders of the US$3.5bil facility include export credit agencies such as the Export-Import Bank of the United States, Euler Hermes AG, and Export-Import Bank of Malaysia, the statement said. — Bloomberg
