Dubai-based hotel operator Jumeirah Group has finally signed a $1.4bn loan that was launched five months ago.

The company appointed the UK’s Standard Chartered and HSBC, and the local Abu Dhabi Commercial Bank to arrange the deal in May, but received only limited interest from other banks about joining the funding group. Only three new banks joined the transaction, the Dubai-based Emirates NBD, Mashreq and Dubai Islamic Bank.

“Jumeirah is a great company, but the pricing on this transaction was too low and there was no structure or security, especially considering most of the proceeds are going to the parent company,” says one banker who declined to join the lending group. The deal was priced at 2.75 per cent above the London interbank offered rate (Libor) and has a tenor of six years.

Jumeirah Group said in a statement that the loan would be used to fund its own expansion and also for the “general corporate purposes, at the parent level, for Dubai Holding Commercial Operations Group”. Sources close to the deal say Dubai Holding will use about $1bn of the loan proceeds to repay its outstanding bonds.

Banking industry sources say another Dubai Holding subsidiary is also expected to start trying to raise new funding before the end of the year, as the parent company looks to tackle its upcoming debt repayments.