DUBAI, June 24 Borse Dubai, the emirate's holding company for its stock exchanges, has refinanced a half-billion dollar loan at an ultra-low rate, setting the seal on its recovery from a financial crisis several years ago.
The company agreed this week to take a $500 million, three-year sharia-compliant loan from Dubai Islamic Bank , sources familiar with the deal told Reuters. This replaced a maturing three-year loan arranged by Emirates NBD .
One source said the latest loan cost 90 basis points over the London interbank offered rate, compared to 210-220 bps for the previous loan.
Over the last several months, a string of United Arab Emirates 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. Borse Dubai's new loan is cheap even by those standards.
Bankers worried in 2009 that Borse Dubai, the holding company for Dubai Financial Market (DFM) and NASDAQ Dubai, might default on its debt.
But Borse Dubai's finances have since then been strengthened by a recovery in the emirate's markets, despite a sharp pull-back in stock prices over the past few weeks. DFM's net profit surged eightfold from a year earlier to 215.1 million dirhams ($58.6 million) in the first quarter of 2014.
Borse Dubai has a 20.64 percent stake in the London Stock Exchange Group and a stake of about 16 percent in the NASDAQ OMX Group, according to its website. (Reporting by Andrew Torchia; Editing by Olzhas Auyezov)