DDF re-prices $1.75bn loan for second time

Dubai Duty Free (DDF) is re-pricing a $1.75 billion syndicated loan for the second time in just over a year to obtain more favourable terms, a fresh sign of banks' willingness to lend cheaply to the emirate.

The six-year loan, originally signed in July 2012, was split between dirham- and US dollar-denominated tranches, both priced at 325 basis points over the London interbank offered rate (Libor).

Last year the state-controlled retailer negotiated the pricing of the dirham-denominated tranche to 225 bps and the dollar tranche to 250 bps. On Tuesday, the DDF said it was re-pricing the dirham tranche further to 150 bps and the dollar tranche to 175 bps.

Another $750 million, dollar-denominated loan, taken last September to fund the company's expansion at Dubai International Airport, is also being re-priced to 175 bps, the company added.

Citibank led the re-pricing of the $1.75 billion facility while Dubai's Emirates NBD led work on the second loan, DDF said in a statement.

"The DDF re-pricing exercise is being carried out because the pricing in the loan market in the UAE is very favourable," it said.

Over the last several months, a string of UAE companies have cut their borrowing costs by refinancing loans with cash-flush local banks, aided by improvement in the firms' credit profiles due to a strong economy. Confidence in Dubai has risen because of its tourism boom and a recovery in its property market.


 

Follow Emirates 24|7 on Google News.