National Industrialization Company (Tasnee) has agreed to terms with lenders to refinance cSAR6 bn in debt at Cristal, the company’s 79%-owned titanium dioxide subsidiary, according to a Bloomberg report based on information from people with knowledge of the matter. The new debt will have a duration of three years – with the option to extend to five years – and is priced at 275 basis points above the Saudi Interbank Offered Rate (SAIBOR). The company is expected to sign the new agreement in the next few weeks.   This comes in line with our and the market expectations, as the company had been in refinancing talks with banks since early in the year. The 275 basis point margin is relatively high based on current margins in the market (even debt heavy Sipchem got a margin of 235bps on its SAR1 bn sukuk listing), but is also largely in line with our expectation as the company’s highly-leveraged balance sheet and distressed operations were likely to push banks to ask for higher interest rates. Overall, despite the higher rate, we view this positively as the company would not have been able to repay its debt this year without the refinancing, and this should buy the company some time to continue to restructure its operations and improve cash flow generation. We note however, that we expect the bottom-line this year and next to be weighed down by the higher interest expenses and believe that at current levels, fundamentals are fairly reflected in the stock price. We maintain our Neutral rating. (Bloomberg, Yousef Husseini)   National Industrialization Company: SAR13.29 as of 30 August 2016, Rating: Neutral, FV: SAR14.50 per share, MCap: USD2,371mn, NIC AB / 2060.SE