Abu Dhabi National Hotels is seeking to raise AED1.5bn ($408m) from a group of up to four banks to help fund the company’s developments in the emirate.

National Bank of Abu Dhabi is acting as lead arranger on the deal.

According to industry sources, the potential lenders include Abu Dhabi Commercial Bank and Union National Bank, also of Abu Dhabi.

Abu Dhabi National Hotels wants to borrow the money in dirhams over seven and a half years. Bankers are pricing the debt at about 400 basis points over the Emirates interbank offered rate.

The hotels group wants to raise the money by the middle of October, says a banker in Abu Dhabi.

It also wants to structure the debt as a corporate hybrid facility, a type of bond that has a lower repayment priority than other types of debt.

Bankers working on the deal say they could raise the money ahead of schedule.

“Abu Dhabi National Hotels is a strong business and the short tenor and good pricing make this an attractive deal,” says a banker looking at the transaction.

The hotels group is currently working on the AED700m development of the Park Hyatt hotel on Saadiyat Island in Abu Dhabi.

In June, the group appointed the UAE’s Alec to build the hotel.

Abu Dhabi National Hotels is also developing the AED1bn Gulf Hotel on Abu Dhabi Island.

In the first half of 2009, the company reported net profits of AED324.2m, 17.1 per cent up on the same period in 2008.