Tabreed seeks $300m in financing

31 October 2003

Abu Dhabi-based National Central Cooling Company (Tabreed) is seeking almost $300 million in fresh financing through an AED 700 million ($190.7 million) syndicated loan and a $100 million sukuk issue.

HSBC is the mandated lead arranger on the commercial debt. Syndication was launched in early September and is due to close in the first week of November. The 12-year facility is priced at 150 basis points (bp) over Emirates interbank offered rate (Ebor) for the first 10 years, rising to 200 bp for the final two. The size of the transaction was raised from AED 450 million ($122.6 million) due to heavy oversubscription. Part of the funding will be used to refinance an existing loan and the remainder for new financing. Tabreed is undertaking a programme of local and regional expansion, taking in Qatar and Saudi Arabia (MEED 25:4:03).

The local National Investor has been mandated to lead arrange the planned $100 million, five-year sukuk issue and Tabreed is also seeking an international partner. Three banks are understood to have been shortlisted for the mandate. Tabreed is looking to issue the paper in early 2004.

‘The sukuk issue will allow us to take advantage of the growing market for these instruments and diversify our funding sources,’ says a Tabreed executive. Sukuks are becoming an increasingly popular source of both government and corporate financing (MEED 24:10:03, Cover Story).

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