Emirates NBD tops in UAE syndicated loans

Dubai: Emirates NBD, the biggest bank in the Gulf by assets now tops the league table for syndicated loans in the UAE for the first four months of this year.

The bank executed nine deals this year with a total value of $14.7 billion. "Traditionally the corporate syndication deals in the UAE were led by international banks.

With the growing appetite for finance, local banks are emerging as a big force in the loan syndication market," said Rajan Khetarpal, Deputy General Manager & Head, Global Debt Capital Markets & Overseas Corporates.

During the past four months, UAE based companies have raised more than $28 billion through club deals and at the current level of demand, Emirates NBD expects the total size of syndication to exceed $150 billion this year up by 50 per cent from about $100 billion loan deals done last year.

According to bankers, there has been a big surge in demand for big-ticket loan syndications due to a number of factors such as increased number of leveraged buyouts (LBOs) by the UAE based companies, growing financing needs of local companies expanding their business activities and the growing funding needs of mega projects.

Apart from the big surge demand for funds from the local firms, the tight liquidity in the international syndication and bond markets following the US subprime crisis last summer is also driving the demand for club deals from local and regional banks.

"While there has been a big growth in demand for funds over the last few years, many local banks like us have been quick to join syndication business. Though initially as secondary participants in some of the issues, we now increasingly play the role of lead arrangers," he said.

Despite the crisis of confidence in the international markets, Khetarpal said Gulf Cooperation Council (GCC) markets remain remarkably resilient, as there is strong demand for local corporate debt within the GCC region and Far East markets including China.

Bankers expect the pricing will continue to be on the upper side for the next two quarters due to the increased funding costs for banks and is expected to stabilise in the fourth quarter of this year as the market finds new benchmarks.

Key players in the syndication market expect corporate loan volumes to continue to grow at a steady pace on account of sovereign backed acquisitions, sizeable number of infrastructure related projects, a large refinancing pipeline and ongoing turmoil in the international bond markets.