- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 04:19 05:39 12:19 15:45 18:53 20:13
Deals since March last year include loan facilities to Ipic, QTel, Dewa and Dubai Civil Aviation Authority. (EB FILE)
The UAE and Qatar have led the region in corporate syndicated loan deals in the first quarter of this year after a gap of about six months, recent data shows.
The momentum for GCC's syndicated loan market is strongly building up, said industry players.
According to estimates, around $41 billion (Dh150.4bn) of refinancing requirements are upcoming in 2011 for GCC corporate, presenting a challenge for non-sovereign borrowers.
The first quarter saw two deals each from UAE and Qatar. Quoting data from Thomson Reuters Market Briefings, a senior executive from BNP Paribas said the GCC syndicated loan market has returned for quasi-sovereign corporates but still needs to be tested for non-sovereign borrowers.
According to the data, since March 2009, among the deals that were finalised in the region, the largest one was $5bn for Ipic in June 2009. First quarter of the year saw a $3.6bn term loan to Ipic with a three year maturity, $2.5bn revolving credit facility (RCF) to Mubadala apart from $2bn RCF to QTel and $650 million to Qatar Aviation.
The main deals since March last year include loan facilities to Ipic, QTel, Dewa, Zain Saudi, Qatari Diar and Dubai Civil Aviation Authority. "The momentum in the GCC syndicated loan market is strongly building up given the large over-subscription witnessed so far in 2010," said Julian van Kan, global head of loan syndication and trading, BNP Paribas.
Regional financial institutions need to extend their own maturity profiles on competitive terms and large upcoming refinancing requirements need to be addressed, an estimated of US $41bn in 2011 for GCC Corporate, he said.
The margins for the deals this year varied from 115 basis points above the benchmark rate to 250 bps. "We expect that pricing has reached a floor reflecting the increasing cost of funding for banks. However, five-year money is now available for quasi-sovereign borrowers and we also expect to see a return of underwriting in the region, he said.
Industry analysts said several challenges lie ahead for non-sovereign borrowers.
For the GCC large and mid-cap borrowers to return, improved transparency and corporate governance are the pre-requisites.
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