TECOM Investments has closed a AED4 billion ($1.1 billion) loan after exercising an option to increase the size of an existing facility completed earlier this year, the business park operator and one of the key assets of Dubai Holding said.
In January, the company said it had raised AED3.53 billion through a loan which also had a tranche which allowed Islamic banks to participate. It had an option to raise the loan amount and a marketing period to attract other banks would be completed by the end of March.
TECOM confirmed in a statement to Reuters on Tuesday that it had completed the upsizing option and closed the transaction at AED4 billion. It did not elaborate further.
The firm said in January that the cash would be used "to fund the company's general corporate needs, new developments and growth plans, as well as other strategic objectives".
The unit of Dubai Holding, the investment vehicle of the emirate's ruler, is borrowing the cash for eight years under an amortising structure, according to three banking sources aware of the matter.
Under an amortising deal, the borrower repays parts of the loan throughout the duration, as opposed to a bullet schedule which only requires interest payments to be serviced.
Banks could contribute to the deal in either dirhams or dollars, with two of the sources confirming the interest rate on the local currency tranche was set at 235 basis points over the Emirates interbank offered rate (Eibor) and 260 bps over the London interbank offered rate (Libor) for the dollar piece.
Mashreq was the coordinator for the loan, joined by Abu Dhabi Commercial Bank, Citi, Dubai Islamic Bank and Noor Bank as bookrunners. Commercial Bank of Dubai joined prior to the marketing period beginning, with Ajman Bank, Gulf Bank, Masraf al Rayan and Sharjah Islamic Bank signing up during, according to the two sources.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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