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Mon 11 Jul 2011 04:27 PM

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Dubai's Majid Al Futtaim seeking to raise $1bn in loans

Builder and owner of shopping malls is planning to invest $3.5bn for Middle East expansion

Dubai's Majid Al Futtaim seeking to raise $1bn in loans
EXPANSION PLANS Majid Al Futtaim Holding, the owner of City Centre shopping malls is raising $1bn to fund expansion (ITP Images)

Majid Al Futtaim Holding LLC, the operator of Carrefour SA stores in the United Arab Emirates, is raising $1bn from three-year and five-year loans to fund expansion, according to two people familiar with the deal.

The three-year revolving credit facility pays a margin of 250 basis points over the benchmark rate, said the people, who declined to be identified before the terms are public. The five-year amortizing loan pays a margin of 275 basis points over the benchmark rate, which rises to about 315 basis points after including fees, the people said. The loans are being raised in both dollars and dirhams.

A spokesman for Dubai-based Majid Al Futtaim declined to comment.

Barclays Capital, Emirates NBD PJSC and Standard Chartered Plc are coordinating the loan, the people said. The City Centre shopping mall owner hired the same banks to arrange a $2bn medium-term note programme on June 14.

Majid Al Futtaim postponed a plan to sell five-year bonds bonds last month after price bids were below expectations, Group Treasurer Daniele Vecchi said in an interview July 5.

The builder and owner of shopping malls across the Middle East plans to invest $3.5bn on expanding in Egypt, Lebanon, Syria and the United Arab Emirates. Its shopping mall in Beirut will be completed in October 2012 while a mall is underway in Cairo costing AED2.8bn.

Standard & Poor’s assigned the company a rating of BBB, the second-lowest investment grade score. A basis point is 0.01 percentage point.

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