Kuwaiti phone company is working with six banks to raise loans to refinance debt
Mobile Telecommunications Co, the Kuwaiti phone company known as Zain, is working with six banks to raise $1.5 billion of loans to refinance debt, according to three people with knowledge of the situation.
Citigroup, BNP Paribas, Credit Agricole, Standard Chartered, WestLB and National Bank of Kuwait are helping Zain arrange the financing, said the people, who declined to be identified because the discussions are private.
Zain spokesman Antoine Abou Khalil declined to comment.
Chief Financial Officer Ossama Matta said in September the company was considering options for a $1.5 billion credit line to refinance debt at lower rates.
Zain last year signed a $610 million two year Islamic loan that offers lenders a return of 425 basis points more than the London interbank offered rate, according to data compiled by Bloomberg. In Islamic financing, investors earn a predetermined return instead of interest, which is forbidden under Shariah law.
The company also has a $4 billion credit line coming due next year, on which it paid initial interest of 85 basis points more than Libor, Bloomberg data show.
Three month Libor, an average of rates set daily by banks and used as a borrowing benchmark, is 0.2959 percent. A basis point is 0.01 percentage point.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.