Dubai to raise $800m monetising Salik receipts

4 banks are lead arrangers and book-runners; Dewa to repay loan portion early

Dubai hired local and international banks to raise $800 million by securitising road toll receipts and will use the proceeds to fund infrastructure projects in the Gulf emirate, the government said.

The dual currency, six-year financing would support the Roads and Transport Authority's infrastructure projects and was expected to have a conventional and Islamic tranche, according to a government statement on Thursday.

Citibank, Commercial Bank of Dubai, Emirates NBD and Dubai Islamic Bank (DIB) are the mandated lead arrangers and book-runners for the financing.

The transaction was expected to be syndicated further to a group of banks, the statement said.

In a further boost to confidence, state-owned utility Dubai Electricity and Water Authority (Dewa) said separately it will repay a portion of its $2.2 billion loan, due 2012, before maturity.

Dewa to repay loan portion early

Dewa will repay Dh5.4 billion ($1.47 billion) of an Dh8.08 billion facility on April 13, a statement said.
This includes a Dh2.7 billion payment due on October 13, 2011. The original loan - which had a conventional and an Islamic component - was signed in 2009.

"Dewa's financial position is solid and strong, and it is capable of repaying its syndication loans not only when they become due but also prior to the maturity date," said Saeed Mohammed Al Tayer, chief executive, in the statement.

Income boost for Dubai

Dubai launched its Salik electronic toll collection system in 2007 to ease congestion in the regional trading hub, which now has some 1.9 million inhabitants, and generate more income for the emirate, which lacks the oil wealth of neighbouring Abu Dhabi.

The emirate's Roads and Transport Authority, which operates Salik, was projected to contribute some Dh3.4 billion ($925.7 million), or 11.5 per cent of last year's budget income. The actual Salik contribution has not been made public.

The emirate is not considering new taxes to boost its revenue base, although it might raise its road toll fee if necessary, a senior government official said in January.

In October, Dewa sold a $2 billion dual-tranche bond which was its second issue in 2010 and attracted hefty demand.

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