Dubai Duty Free refinances $2.5bn loans

Airport retailer Dubai Duty Free (DDF) has completed re-pricing a $1.75 billion loan for the second time in just over a year to obtain more favourable terms, with a second facility worth $750 million also renegotiated to reduce the borrowing cost.

The state-controlled retailer launched the re-pricing exercise last month, one of a string of United Arab Emirates companies to cut their borrowing costs in recent months by refinancing loans with cash-flush local banks.

The $1.75 billion six-year loan, originally signed in July 2012 but re-priced a year later, now carries an interest rate of 1.5 per cent above the Emirates Interbank Offered Rate (Eibor) on the dirham-denominated tranche after the second amendment, said a statement from DDF.

The new margin on the dollar-denominated portion of the loan is 1.75 per cent above the London interbank offered rate (Libor).

"In consideration for consenting to the re-pricing request, financial institutions are compensated with an amendment fee," the retailer said in its statement without detailing how much the fee was.

Citi acted as sole coordinator for the loan re-pricing.

A separate $750 million, dollar-denominated loan taken last September to fund the company's expansion at Dubai International Airport has also been re-priced to 1.75 per cent over Libor from 2.25 per cent, in a deal arranged by Emirates NBD.

As well as DDF, ports operator DP World refinanced and tripled in size a $1 billion loan with most of the lifespan remaining in July to secure better pricing, while Atlantis, The Palm, the luxury hotel situated at the top of a palm-shaped manmade island, is currently doing the same on a $880 million facility.

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