Qatar's CBQ gets $800mn loan to fund UAE deal

Lender to borrow to fund $601mn acquisition of United Arab Bank, bankers say.
Qatar's CBQ gets $800mn loan to fund UAE deal
By John Irish and Mohammed Abbas
Thu 11 Oct 2007 03:53 PM

Commercial Bank of Qatar is borrowing $800 million to help fund its acquisition of the United Arab Bank of the UAE, two bankers involved in the transaction said on Thursday.

Commercial Bank said last month it had won initial approval from the central bank to buy 40% of the UAE lender for $601 million.

"It's for general corporate activities and partly to finance the acquisition of United Arab Bank," one banker told Reuters in Dubai.

A second bank confirmed the information to Reuters in Bahrain. Both asked not to be identified.

The loan would be a "club deal" they said, meaning it would be financed by lenders directly involved in the transaction rather through syndication to other banks.

Nine banks are involved in the deal including Barclays, JPMorgan Chase, ABN Amro and BNP Paribas, the bankers said.

Commercial Bank Chief Executive Andrew Stevens declined to comment to Reuters.

The UAE purchase would be the biggest ever for Commercial Bank, which bought a 34% stake in National
Bank of Oman in 2005.

United Arab has nine branches, including three in Dubai and one in Abu Dhabi, according to its website.

The lender is based in Sharjah, the third-largest member of the UAE federation.

Gulf Arab banks, buoyed by the economic windfall of record oil prices to the Gulf states, are increasingly looking outside their home markets where greater competition is encouraging them to expand through acquisitions and branch expansion. - Reuters

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