Investment Corporation of Dubai (ICD) is due to complete a $2.8bn loan deal by mid-June, according to bankers working on the transaction.

Banks have been given an extra week to respond with commitments to the deal, which will be used to refinance an existing $4bn facility that matures in September. Lenders now have until around the end of the first week of June to get internal approval to play a part in deal.

Bankers working on coordinating the loan hope that they will be able to settle pricing and move the deal into documentation by mid-June. Originally banks were asked to give their commitments to the new deal by 25 May, with a hope of closing the transaction by 8 June.

Sources say around 12-15 banks will participate in the loan, with several new banks joining the group of lenders and several existing lenders to the firm dropping out of the new deal.

The deal is split between an Islamic and conventional tranche, with the UK’s HSBC, the US’ Citigroup and the local Emirate NBD coordinating the conventional loan and the UK’s Standard Chartered and the local Mashreqbank coordinating the Islamic loan. Although the deal is expected to raise about $2.8bn, with ICD repaying the rest of the loan from its own resources, bankers remain tight-lipped about what the final amount raised will be.

A second Dubai deal is also currently raising money from the loan markets. The Dubai government is planning to raise $800m in a transaction securitised by revenues from the Salik toll system operated by the Roads & Transport Authority (RTA).

Bankers close to that transaction say the deal is oversubscribed and as a result the initial pricing of 350 basis points above the London interbank offered rate (Libor) may be lowered by around 25 basis points. The ICD loan is expected to have a margin of around 390 basis points above Libor, including fees.

“If both the ICD and the Salik transaction get done without incident over the next few weeks it will be a really good sign for Dubai that confidence has been restored,” says a loan banker in Dubai.

He adds that it will also be a positive sign for Dubai Electricity & Water Authority (Dewa), which is now starting to talk to banks about financing its first independent power project (IPP).