Tecom Group, a business park operator owned by Dubai Holding, is considering refinancing and increasing the size of a loan of around $1 billion it raised in 2014, banking sources said.

The company borrowed Dh3.53 billion ($961 million) at the end of 2014 to back general corporate needs and new development plans.

It is now in talks with banks to refinance that facility and potentially increase it to Dh6 billion, as it seeks to take advantage of favourable local loan market conditions.

Syndicated loan volumes in the Middle East fell significantly last year as a number of borrowers opted to raise funding through bond issues instead. But as global interest rates increase, some borrowers in the region are looking again at bank debt as a cheaper form of financing.

Additionally, liquidity among local banks has improved since oil prices started rising again, translating into better pricing and borrowing terms.

Formerly known as Tecom Investments, Tecom Group, which declined to comment, says it has a portfolio of 11 business parks where around 5,600 businesses employ a total workforce of 90,000.

It is in talks with a group of banks including most of the lenders that participated in the 2014 facility plus some new ones, the sources said. The loan will likely be provided exclusively by local banks.

Abu Dhabi Commercial Bank, Citigroup, Commercial Bank of Dubai, Dubai Islamic Bank, Mashreqbank and Noor Bank were the arrangers of the 2014 facility, which is due in 2022, Thomson Reuters data shows.