The Dubai government has started contacting banks seeking interest in raising over $500m secured against cash flows from Dubai Duty Free, which operates retail space at Dubai International airport.

Investment Corporation of Dubai (ICD), which owns the duty free company, has sent a request for proposals (RFP) to banks, working alongside the emirate’s Department of Finance. They are seeking banks to act as lead arrangers on the deal, which could exceed $500m based on response from the bank market.

The RFP is understood to have been sent before the end of last year and banks are expected to respond over the next few weeks. The financing will have a tenor of six years, according to several bankers who are looking at the deal.

Although described as a securitisation by some bankers, which involves ringfencing cashflows to repay the debt, not all bankers agreed with that description. One banker says, “It is not really a true securitisation, it is more like a deal backed by cash flows with the funds used for expansion.”

Dubai raised $800m in mid-2011 from securitising income from the Salik road toll system. The deal attracted so much interest from banks that the pricing was actually lowered before it closed.