Dubai Investments looks to raise $300m loan

05 June 2016

Investment holding company plans to fund real estate project with the loan

Dubai Investments (DI), an investment holding company whose portfolio includes financial services and industrial firms, is in talks with a group of local and regional banks for a $300m loan.

The Dubai-listed company is raising finances to fund its Mirdif Hills project in Dubai, UK news agency Reuters quoted its CEO, Khalid bin Kalban, as saying.

DI, which is 11.5 per cent owned by government-controlled sovereign wealth fund Investment Corporation of Dubai, is in negotiations with three UAE lenders and one Gulf-based financial institution, Kalban said, without elaborating.

He expects the loan to be finalised by the end of the summer. The Gulf bank will lend in dollars, and the local financiers will lend in UAE dirhams, Kalban added.

Mirdif Hills is a mixed-use residential, commercial and retail development. The development of the project is expected to cost AED1bn ($272m), but the project in addition to the land bank is worth about AED2.5bn, Kalban said.

Governments and private firms in the region are queuing up to tap debt capital markets ahead of a possible interest rate hike by the US Federal Reserve.

Last month Qatar raised $ 9bn in a three-tranche bond offering. Saudi Arabia is looking to raise as much as $15bn from a bond offering after the holy month of Ramadan ends in July. In April, Riyadh also agreed terms with a group of international lenders for a $10bn loan, its first sovereign debt in at least 15 years.

Abu Dhabi, the biggest emirate in the UAE, launched a two-part $5bn bond, while Oman has plans to borrow $5bn-$10bn this year, and is considering a eurobond in the first half of this year. Kuwait is another Gulf country that has indicated interest in tapping capital markets to raise funds.

On the corporate side, Dubai’s Noor Bank has successfully launched its $500m debut capital-boosting bond, the UAE’s Emirates Islamic bank has sold a $750m sukuk (Islamic bond), and Qatar’s Barwa Real Estate signed $1.13bn-worth of financing agreements with a local lender in May. Saudi Electricity Company (SEC) has secured a $900m loan in recent weeks. Two Dubai financiers, including Emirates NBD, are also in talks with lenders to raise a total of $1.7bn in financing.

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