Dubai International Capital asks banks for $15m each

25 October 2009

Dubai Holding investment arm seeking to refinance $600m loan

Dubai International Capital (DIC) is asking banks for a maximum of just $15m each during the syndication of a $550m loan, with the smallest commitments going down to $5m.

Bankers close to the deal say that the small ticket size is intended to help encourage the participation of smaller regional investors and Asian lenders.

DIC is offering investors in the loan a margin of 400 basis points above the London interbank offered rate (libor), and fees go up to 300 basis points. The deal also carries a guarantee from DIC’s owner, Dubai Holding, which is itself owned by the Dubai government.

The deal is structured as a two year loan, with the option for a one year extension. Banks are being advised that DIC intends to close the deal by 12 November.

The UAE’s Mashreqbank and Noor Islamic Bank, along with the UK’s Standard Chartered and Royal Bank of Scotland, have been appointed to arrange the facility, which will be used to replace a $600m loan arranged by France’s Calyon in 2007, which matured in August.

A bridge loan was put in place in August to temporarily replace the $600m loan. The bridge loan was provided by the four banks arranging the new facility, and India’s Bank of Baroda and State bank of India, the UAE’s Commercial Bank of Dubai, First Gulf Bank, and Union National Bank, the UK’s Lloyds TSB, and the US JP Morgan.

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