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Wed 18 Mar 2015 04:17 PM

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DP World holding firm said to close $1.2bn loan deal

Banking sources say Port and Free Zone World will use funds to meet commitments at group and subsidiary levels

DP World holding firm said to close $1.2bn loan deal

Port and Free Zone World (PFZW), the holding company for Dubai-based ports operator DP World, has closed a $1.2 billion loan deal, banking sources aware of the matter said on Wednesday.

The funds have a lifespan of five years, and will be used to help the company meet commitments at the group and subsidiary levels, two separate sources said.

PFZW is part of Dubai World, which is currently close to securing a renegotiation of terms on $14.6 billion of debt that was originally restructured in 2011.

A spokesman for PFZW declined to comment when contacted by Reuters.

Citigroup, Emirates NBD and HSBC arranged the deal and were joined by a group of seven other banks, twoDubai-based sources said.

The additional lenders were Dubai Islamic Bank, Barwa Bank, Commercial Bank of Dubai, Mashreq , Noor Bank, Standard Chartered and Union National Bank.

Dubai companies have used a strengthening economy and high levels of liquidity in the banking system to tap the loan market over the past 18 months to refinance existing debt, often at significantly cheaper rates.

The new loan is priced at 225 basis points over the London interbank offered rate (Libor), the two Dubai-based sources said.

The ports group was last in the market in September 2011 when it closed a $850 million five-year loan at a margin of 350 bps over Libor, according to Thomson Reuters data.

PFZW formally completed the sale of its unit Economic Zones World to another subsidiary DP World on Tuesday, a deal seen as providing cash to parent Dubai World to help meet its debt repayment schedule.

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