Investment Corporation of Dubai (ICD), the government-owned sovereign wealth fund, has launched a $2bn refinancing aimed at replacing an existing loan that is due to be repaid in August.
Eight banks have been appointed to arrange the transaction, which is priced at 215 basis points above the London interbank offered rate (Libor). Banks have been invited to commit to the deal in ticket sizes of either $50m, $100m, or $150m.
The loan will be split between an Islamic and a conventional loan, in either dirhams or dollars. Bankers in the UAE say the deal was launched on 18 March and lenders have been asked to respond with their commitments by 8 April.
“They have gone out to a pretty wide group of banks and are trying to get Islamic, conventional and dollar and dirham liquidity,” says one banker close to the deal.
|Select ICD investments|
|Emirates NBD||Financial Services|
|Dubai Islamic Bank||Financial Services|
|Commercial Bank of Dubai||Financial Services|
|Borse Dubai||Financial Services|
|Noor Islamic Bank||Financial Services|
|Emirates National Oil Company||Energy and industry|
|Dubai Aluminium (Dubal)||Energy and industry|
|Dubai Cable Company (Ducab)||Energy and industry|
|Emaar Properties||Real estate|
|Dubai Duty Free||Retail|
Another source adds, “From a credit perspective ICD is a good name, but pricing could be a little too tight for some people.”
The deal is being arranged by the local Abu Dhabi Islamic Bank, Abu Dhabi Commercial Bank, Commercial Bank of Dubai, Dubai Islamic Bank, Emirates NBD, the US’ Citigroup, and the UK’s HSBC and Standard Chartered.
ICD began talks with its key relationship banks in January in order to start preparing for this refinancing. The existing $2bn loan was put in place in 2008 and had a tenor of five years and was priced at 150 basis points above Libor.
ICD is a holding company for government stakes in company’s including Emirates Airlines, Dubai Aluminium (Dubal), Emirates NBD, Dubai Islamic Bank, and Borse Dubai, the holding company for the Dubai Financial Market and Nasdaq Dubai. It is considered one of the emirate’s crown jewels as it receives dividend income from these companies, many of which are some of the best performing government entities.