Kuwaits's Global Investment House cancels $410mn loan

BANK LOAN: GIH was to use the money to buy a 20 percent stake in National Bank of Umm Al-Quwain. (Getty Images)

Kuwait's Global Investment House (GIH) has cancelled a $410 million, three-year syndicated term loan after deciding not to proceed with its acquisition of a 20 percent stake in National Bank of Umm Al-Quwain, which the debt was to be used to fund, a banker close to the deal said on Monday.

Initial mandated lead arrangers and bookrunners BNP Paribas and WestLB had launched syndication in September and selldown was still open when the decision was made to terminate the deal.

The banker said the borrower had decided not to go ahead with the underlying acquisition at a time of so much uncertainty.

Syndication had been far from smooth because of difficult conditions in the loan market.

Bank meetings for potential lenders took place in Dubai, Singapore, Taipei and London during the week after the collapse of Lehman Brothers and a decision was subsequently made by the arranging banks to increase the margin by 35 basis points (bps) to 210 bps over LIBOR.

GIH tapped the loan market in February this year for a $200 million 12-month loan via WestLB. That loan paid a margin of 60 bps over LIBOR stepping up to 90 bps after six months.

Founded in 1998, GIH is listed on both the Kuwait and Bahrain Stock Exchanges and Dubai Financial Market. The company is rated BBB by both Fitch and S&P. (Reuters)

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