By Christopher Mangham
Loan refinancing will be largely self arranged with investment company dictating pricing.
Abu Dhabi government owned Mubadala Development Company is in talks with banks to refinance a $2 billion syndicated loan that matures in April, banking sources close to the deal said.
The loan will be one of the first for a Gulf based company since Dubai shocked world markets on Nov 25 when it requested a standstill on $26 billion worth of debt owed by state owned conglomerate Dubai World, a flagship of the emirate.
Oil rich Abu Dhabi, the wealthiest of the seven member UAE federation, is regarded very differently to debt laden Dubai by lenders and the flow of funds is expected to shift to richer and more creditworthy Gulf economies, the bankers said.
Mubadala offers comfort to lenders with its 100 percent government ownership and will be able to call on its close relationship banking group to agree a new deal, the bankers said.
One of the bankers said: "Mubadala is doing the rounds and looking for a refinancing plus a potential increase...it will be largely self arranged with Mubadala dictating pricing."
Talks are centred around the issue of pricing which will set a new benchmark for syndicated loans in the Gulf region, another banker said.
The original deal was a $2 billion, three year club loan signed in April 2007 via 21 banks. It paid a margin of 17.5 basis points over LIBOR, according to Reuters LPC data. (Reuters)