- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 03:59 05:25 12:20 15:41 19:10 20:36
Dubai Aerospace Enterprise (DAE) yesterday said it closed an $800 million (Dh2,938m) term loan and revolving credit facility jointly arranged by Citibank, Deutsche Bank, Emirates Bank International, Lloyds TSB Bank and an Islamic tranche managed by Noor Islamic Bank.
The facility, that has been availed for three years, will be used for DAE's general corporate purposes, it said.
Omar bin Sulaiman, DAE Group Managing Director, said: "This facility will allow DAE to continue its impressive growth into a world-class global aerospace business. DAE is determined to support Dubai's continued emergence as a globally-renowned aerospace centre and aviation hub."
Finance experts view the deal as "secure and low risk" as it is backed by the government.
According to experts, in spite of the massive size of the deal, it may not necessarily result in optimism for entities seeking heavy refinancing. "In the region in general, we are facing low liquidity, there is a funding shortage. This deal is government backed, which makes it secure and low risk. I do not think it is indicative of any optimism in financing. The syndicated finance market is far more affected by events at Global Investment House and is presently going through a tough phase," said Raj Madha, Director of equity research at EFG Hermes.
Meanwhile, the Abu Dhabi Islamic Bank on Saturday agreed to a Dh1.45 billion financing for two engineering contractors to assist the development and expansion of the Zayed University campus in Abu Dhabi.
Finance experts said the deals were backed by the government and what remained to be seen was the ease or difficulty with which private or small and medium enterprises get financing from banks.
"Companies with government stakeholders and big corporates with strong balance sheet position may not face problems in receiving various lines of credit at nominal rates but others especially SMEs ,which constitute a sizeable chunk, will definitely face problems during this crisis period. It remains to seen at what rates is money lent to them," said B George Ollassa, research analyst at Dun & Bradstreet South Asia.
Entities like Borse Dubai is seeking refinancing to the tune of $ 2.5bn. "These are specific deals. Backed by the government, they are low risk. I do not think it marks beginning of optimism for any other entities that are seeking heavy refinancing," said Madha.
The UAE Central Bank has advised banks to contain their loan growth rates in view of the global crisis.
Follow Emirates 24|7 on Google News.