Business | Markets
Channel Sponsor
Borse Dubai seeks to refinance loan
State-run Borse Dubai has launched syndication of a $2.5 billion loan that will refinance the company's $3.78 billion loan agreed in March 2008 to back its acquisition of Nordic exchanges group OMX, banking sources close to the deal said.
- Reuters
- Published: 23:33 January 14, 2009
London: State-run Borse Dubai has launched syndication of a $2.5 billion loan that will refinance the company's $3.78 billion loan agreed in March 2008 to back its acquisition of Nordic exchanges group OMX, banking sources close to the deal said.
HSBC is coordinating the one-year deal, which includes a one-year extension option. The margin is 325 basis points (bps) over Libor, with an additional fee of 75 bps if the borrower opts to extend.
Banks are invited to commit $100 million for an upfront fee of 105 bps, $75 million for 90 bps, $50 million for 70 bps, or $30 million for 55 bps.
Lenders are invited to commit in dirhams, euros or dollars, and talks are going on to include an Islamic tranche, all of which widens the pool of liquidity, one of the bankers said.
The original financing, which matures on February 28, is split between a $2.226 billion facility and a £796 million facility. It paid a margin of 70-130 bps over Libor.
With the maturity date looming, the timetable for syndication on the new loan is tight.
Bankers say that the difficult credit conditions will make it tricky to raise $2.5 billion.
"It's a good test of the market I guess," a senior loan banker said.
The deal will provide an indicator of how the loan market in the Gulf will perform in the coming months.
Should the loan succeed, bankers say it will establish a new pricing level on loans for Gulf borrowers looking to refinance loans in a post-Lehman market.
Reuters Loan Pricing data puts the amount of Middle Eastern loans that need to be refinanced in 2009 at $31 billion.
Share this article
Popular in Business
-
Budget travel
Airlines in the region
Take a pictorial look at some of the budget airlines in GCC
Business Editor's choice
-
Experts seek solutions to global gloom
Suggestions formulated in Dubai will feature in next year's WEF
-
Qatar benefits from diversification
Doha's readiness to look beyond hydrocarbons as a growth engine bodes well
-
When the Web lives worldwide
Cutting-edge firms are building massive data facilities all over the globe
