Investment Corporation of Dubai (ICD), the emirate’s sovereign wealth fund, has commenced talks with some of its key relationship banks about refinancing a $2bn loan that matures in August.

The company is understood to have approached banks in mid-January to start appointing a group of lenders to lead the refinancing by early March.

The $2bn debt was originally put in place in 2008 when ICD raised a $4bn three-year loan and a $2bn five-year loan. In 2011, ICD dropped plans to refinance the $4bn tranche through a new syndicated loan of around $2.8bn and repaid it from its own resources, although at the same time it also agreed a series of bilateral loans with its banks. Sources say the company may yet decide to just repay the $2bn, but at the moment it seems to be planning to refinance it.

The $2bn loan was originally priced at 150 basis points above the London interbank offered rate (Libor). “Dubai has been performing well compared to where it was a few years ago and ICD contains some of the crown jewels,” says one banker close to the process.

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.

“Things are still at a very early stage at the moment, but several banks are involved in the talks,” says another banker at an international lender in Dubai.

The 2008 deal was arranged by the UK’s Royal Bank of Scotland, Standard Bank, Barclays Capital, and HSBC, the US’ Citigroup, and the local Dubai Bank, Dubai Islamic Bank, and Noor Islamic Bank.

Attitudes toward Dubai have improved considerably since the emirate narrowly avoided a default on its debts in 2009, and embarked on a painful series of mutli-billion dollar debt restructurings at state-owned firms. In January, the emirate completed a $1.25bn sukuk (Islamic bond) issue that attracted orders of around $15bn as investors bought into stories of its economic comeback.