Abu Dhabi sovereign wealth fund Mubadala Development Company has completed the financing for its $1bn Zayed University project with a group of 11 regional and international banks.

Banks had expressed concerns about the level of repayment guarantees on the project, and this delayed the funding process since it began in April.

The $830m debt on the project has a tenor of 10 years and pricing starts at 290 basis points above the London interbank offered rate (libor), rising to 390 basis points above libor during at the maturity of the loans.

The rest of the financing for the project will come from $70m of mezzanine debt provided by Abu Dhabi’s First Gulf Bank and $10m equity. Mezzanine debt is typically more expensive, but the last in the line of payment obligations for the project company.

The other banks involved in the deal are Abu Dhabi Commercial Bank, Al-Hilal Bank, First Gulf Bank, Union National Bank and National Bank of Abu Dhabi, all of Abu Dhabi, France’s Calyon, Natixis and Societe Generale, Royal Bank of Scotland, Spain’s BIIS, and Bank of Tokyo Mitsubishi (MEED 06:11:09).

The Zayed University campus will cover 800,000 square metres and will accommodate 6,000 students. It is the second university public-private partnership (PPP) transaction in Abu Dhabi, following the $385m financing for Paris-Sorbonne University in December 2008.