DIFC Investments close to securing $1b loan to repay bond due in June

Dubai:DIFC Investments, which owns properties in Dubai's financial centre, almost completed raising a $1 billion (Dh3.67 billion) loan to help repay an Islamic bond due in June, three bankers familiar with the matter said.

Standard Chartered, Emirates NBD, Dubai Islamic Bank and Noor Islamic Bank will lend DIFC Investments the money to enable it to pay the $1.25 billion sukuk, the bankers said, declining to be identified because the information is private.

Unit sale

DIFC Investments has another $147.4 million in liabilities maturing this year and will use its own cash and money raised from the planned sale of its Smartstream Technologies Group unit to repay the rest, one of the bankers said.

A deal is expected to be signed early next month before the sukuk matures on June 13, they said.

The spokesmen for DIFC Investments and Noor Islamic Bank weren't available for comment, while spokesmen for Standard Chartered, Emirates NBD and Dubai Islamic declined to comment. They asked not to be identified because of company policies.

Sustainable revenue

DIFC Investments said this month it was committed to repaying the sukuk based on several factors, including "sustainable revenue streams" and reaching a deal to defer certain debt owed to Dubai's government.

The company sold the floating rate sukuk in 2007, which was managed by Goldman Sachs Group and Deutsche Bank, data compiled by Bloomberg show. The Islamic bonds have risen 5.3 per cent so far this year and were trading at 98.09 cents to the dollar at 3 pm in Dubai.

DIFC opened in 2004 to attract international banks, asset managers and insurers and is home to the regional offices of Goldman Sachs Group, Citigroup and Standard Chartered.

Property decline

Property prices in Dubai fell more than 65 per cent from a peak in 2008 as the global credit crisis forced banks to cut mortgage lending and speculators left the market.

DIFC Investments posted profit from continuing operations of $185.4 million last year after a loss of $285.9 million in 2010, it said.

Revenue rose 8 per cent to $157.5 million and it booked a fair value gain of $180.8 million on property compared with a fair value loss of $374.3 million in the previous year.