AD Ports Group refinances $2.25 billion syndicated loan facility

Dubai: In one of the biggest refinancing deals in the UAE, the AD Ports Group has signed up with two UAE banks to rework its $2.25 billion syndicated loan on 'more favourable terms'. This would lead to the ADX listed company saving up to Dh44 million ($12 million) in finance costs over the next 12 months.

The new facilities give flexibility to AD Ports Group to 'optimally time its return to the debt capital markets'. This is in line with the stated strategy to utilise bonds as the predominant long-term funding vehicle.

The company has been on an expansive investment and acquisition strategy through the last two years, whether that's building or managing ports in overseas markets or corporate dates that gave it new growth lines.

Under the new agreements, the Group’s $2.25 billion syndicated loan from April 2023 is replaced by a Dh9.2 billion ($2.5 billion equivalent) medium-term facility with a 2.5 year maturity, and a Dh1 billion ($273 million equivalent) short-term facility with a 1.5 year tenor.

The two new lending facilities extend the debt maturity timeline to 2026 and beyond.

The refinancing follows Wednesday’s US Federal Reserve Bank decision to ease interest rates, which was also the first rate cut since March 2020. More UAE companies are expected to follow the refinance trend, to make better use of rate cuts in managing their debt costs.

“The new refinancing agreements give (AD Ports) Group greater financial flexibility and allow us to significantly lower our financing costs," said Martin Aarup, AD Ports Group's Chief Financial Officer. "They give us the timing flexibility and ability to optimally take advantage of the easing interest rates cycle to eventually refinance the company’s needs in the debt capital markets at longer tenors and at competitive rates in line with our capital structure.”