Borse Dubai said to refinance $500m loan at ultra-cheap rate

Sources say move by holding company for emirate's stock markets sets the seal on its recovery from financial crisis

Borse Dubai, the emirate's holding company for its stock exchanges, has refinanced a half-billion dollar loan at an ultra-low rate, setting the seal on its recovery from a financial crisis several years ago.

The company agreed this week to take a $500 million, three-year sharia-compliant loan from Dubai Islamic Bank, sources familiar with the deal told Reuters. This replaced a maturing three-year loan arranged by Emirates NBD.

One source said the latest loan cost 90 basis points over the London interbank offered rate, compared to 210-220 bps for the previous loan.

Over the last several months, a string of United Arab Emirates companies have cut their borrowing costs by refinancing loans with cash-flush local banks, aided by improvement in the firms' credit profiles due to a strong economy. Borse Dubai's new loan is cheap even by those standards.

Bankers worried in 2009 that Borse Dubai, the holding company for Dubai Financial Market (DFM) and NASDAQ Dubai, might default on its debt.

But Borse Dubai's finances have since then been strengthened by a recovery in the emirate's markets, despite a sharp pull-back in stock prices over the past few weeks. DFM's net profit surged eightfold from a year earlier to AED215.1 million ($58.6 million) in the first quarter of 2014.

Borse Dubai has a 20.64 percent stake in the London Stock Exchange Group and a stake of about 16 percent in the NASDAQ OMX Group, according to its website.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

NOTE: Comments posted on may be printed in the magazine Arabian Business

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
Does the Saudi IPO signal the end of the age of oil?

Does the Saudi IPO signal the end of the age of oil?

Saudis may want to capitalise on an asset that’s only going to...

China paves way for market-based IPO system

China paves way for market-based IPO system

A new law would let companies, not regulators, determine when...

Trading from the frontline in Palestine

Trading from the frontline in Palestine

Palestine’s economy has been crippled by the war on Gaza but...

Most Discussed