Dubai: Emaar Properties yesterday raised Dh3.6 billion through a syndicated financing facility.
The facility consists of both Islamic and conventional components. An Emaar spokesperson told Gulf News that Dh2.8 billion of the facility is Islamic while Dh800 million is conventional.
Dubai Islamic Bank (DIB), National Bank of Abu Dhabi (NBAD) and Standard Chartered Bank acted as mandated lead arrangers and bookrunners.
"While Standard Chartered subscribed Dh1.8 billion of the facility, DIB and NBAD subscribed Dh1 billion and Dh0.8 billion, respectively," the Emaar spokesperson said.
The syndicated facility is secured against Dubai Mall and is priced 350 basis points above the benchmark rates.
In the third quarter of this year independent analysts had estimated the company's total cash requirement for the year at Dh12.2 billion by year-end.
"We expect the company to incur capex of Dh2.6 billion on its projects and operating expenses and interest cost of Dh2.9 billion in the same period," said a research note from Rasmala, an investment bank.
With the total liquidity of the company an estimated Dh13 billion, the report said Emaar faced a near-term financing requirement of Dh1 billion.
"Initially, the facility will be utilised to repay the existing $300 million facility taken in 2010. Subsequent drawdowns will be made in 2012 as required," Emaar said in a statement.
The remaining portion of the syndicated facility will be used for "repayment of other Emaar loans to extend the maturity from short term to long term," Emaar spokesperson said.
This facility will also assist in reducing the overall financing cost of Emaar due to the lower pricing achieved compared to existing borrowings.
The new facility has dual maturity with 50 per cent repayable in a bullet repayment after five years and the remainder amortised over eight years.
The company raised $500 million through a sukuk issue earlier this year. The sukuk has a maturity of 5.5 years and a yield of 8.5 per cent. Despite the challenging real estate market , analysts acknowledge the company's underlying financial strength and refinancing capability.
Moody's Investors Service recently upgraded the company's corporate family rating to Ba3 from B1.
The company's improved liquidity profile after it accessed debt capital markets and plans to arrange longer term debt were cited for the rating upgrade.
Mohammad Al Abbar, Chairman of Emaar Properties, yesterday said that the latest financing is a further testament to Emaar's ability to raise long-term finance at competitive pricing even in tougher economic conditions.
"Emaar has again been among the first to raise an eight-year financing in the regional markets with the assistance of our core partner banks, which reflects the superior value Emaar has created for its stakeholders through its iconic developments," Al Abbar said.
Emaar reported a net operating profit of Dh1.249 billion in the first nine months of 2011 as revenue reached Dh5.873 billion.