Aabar to close $2bn loan in early August

02 August 2010

Abu Dhabi firm secures loan despite calls for state guarantee

Abu Dhabi investment company Aabar has managed to secure a small oversubscription for a $2bn loan and plans to close the deal in the first week of August.

Bankers close to the transaction say that despite some calls for a sovereign guarantee on the loan, Aabar has managed to secure enough commitments from lenders to close the deal.

Aabar began seeking banks to join the lending group at the beginning of July. Pricing on the loan was set at 150 basis points above the London interbank offered rate (Libor).

The deal is being arranged by Germany’s Deutsche Bank, the US’ Morgan Stanley, the UK’s Royal Bank of Scotland and National Bank of Abu Dhabi (NBAD). Credit Suisse and Abu Dhabi’s Union National Bank have also joined the deal.

The loan is split between a $1.4bn loan and a $600m revolving credit facility, which enables the borrower to repay the loan and draw it down again before the maturity date. Both loans will have a tenor of three years.

Aabar has around AED8bn ($2.1bn) in loans maturing in 2010 and has embarked on a spate of refinancing. In May it refinanced a $800m loan. It also had a $1.63bn loan that matured in May.

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