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London: State-owned investment group Dubai World has signed a $5.5 billion syndicated loan, which will be used to refinance the borrower's $5 billion, 364-day bridge loan that was signed last year, banking sources said.
The new loan consists of a $2.1 billion two-year term loan, a $1.95 billion three-year term loan, a $1 billion five-year term loan and a $450 million three-year revolving credit.
The term loans pay margins of 135-185 basis points (bps) over Libor. Participating banks were invited to commit in US dollars or dirham-equivalent.
This strategy for selling Middle Eastern corporate loans has become common this year since there is a shortage of dollars among Gulf-based banks, stemming from the credit crisis and uncertainty over local currency pegs.
The opportunity to fund syndicated loans in local currency allows loan lenders to sidestep the problem and open up liquidity in the region.
A banker said that about $1.16 billion of Dubai World's loan was committed in dirhams.
Bookrunners are Bank of Tokyo-Mitsubishi UFJ, Calyon, Emirates Bank, HSBC, ING, Lloyds TSB, mashreq, Royal Bank of Scotland and SMBC.
Dubai World's investments span four areas - transport and logistics, drydocks and maritime, urban development and investment and financial services.
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