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Tue 7 Apr 2009 08:15 PM

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Dolphin Energy close to agreeing loan refinancing

Existing $3.45bn loan facility for Abu Dhabi-based gas supplier set to mature in July.

Dolphin Energy close to agreeing loan refinancing
DOLPHIN ENERGY: Gas supplier close to agreeing loan refinancing deal, according to reports. (Getty Images)

Abu Dhabi-based Dolphin Energy is close to agreeing a refinancing for a $3.45 billion loan that matures in July, banking sources close to the deal said on Tuesday.The new loan, for which Royal Bank of Scotland is advising, will include a $1.6 billion commercial tranche and a $500 million Islamic facility, while there will also be a bond issue worth around $500 million, the sources added.

The 10-year loan will carry a margin of 275 basis points (bps) over LIBOR for the first three years, 300 bps to year six and then 350 bps thereafter, one of the sources added.

The source added that lenders have been have been gaining approvals to commit to the deal and the bank group should be finalised soon.

The Dolphin gas pipeline project linking Qatar's giant North Field with the United Arab Emirates and Oman was the first cross-border gas project in the Gulf Arab region. It pumps around 2 billion cubic feet per day to the UAE.

The project was financed in 2005 through a $2.45 billion conventional facility and a $1 billion Islamic loan. The financing, which paid a margin was 35-40 bps, matures in July.

Mubadala Development Co, run by the Abu Dhabi government, owns 51 percent of Dolphin, while France's Total and US Occidental each have a 24.5 percent stake.

The sponsors will provide a $1.2 billion loan to the refinancing package, the sources said.

A second banker said that the refinancing will set a pricing floor for all future project financings in the Gulf.

The banker added that the deal has been popular with lenders as it has the advantage that construction is already completed, so the deal bears no construction risk, as well as the presence of strong sponsors and a number of long-term, 25-year offtaker contracts. (Reuters)

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