DUBAI May 21 DIFC Investments, the investment
arm of the company running Dubai's financial free zone, is close
to securing a $1 billion loan from four banks to help refinance
an upcoming Islamic bond maturity, a banking source familiar
with the matter said.
Emirates NBD, Dubai's largest lender, and Standard
Chartered will contribute an equal amount into the
deal, while Noor Islamic Bank and Dubai Islamic Bank,
also join the deal but with a smaller commitment.
The loan will help refinance a $1.25 billion sukuk maturing
in June, and will be in place in time for the redemption date.
"It's in the documentation phase," the source, who requested
anonymity, said. "There will be a syndication in due course but
they want to deal with the sukuk first."
Mohammed al-Shaibani, chief executive of the Investment
Corporation of Dubai and deputy chairman of Dubai's Supreme
Fiscal Committee, said on Monday that the loan was close to
"There is a ... facility maturing this year with respect to
DIFCI, which is, as we speak, being concluded," Shaibani told
Reuters in Mumbai.
The presence of three Dubai-based may raise compliance
issues on new central bank rules limiting bank lending to
sovereign and state-linked entities.
"We are all comfortable with what we are taking on but with
the new central bank rules on GREs (government-related
entities), we will want to pass on some of our exposures
In April, the UAE central bank introduced new caps for bank
loans made to local governments and their entities in the first
such change in nearly two decades. The International Monetary
Fund said the move would help contain banks' risks from GREs.
DIFC Investments' sukuk obligation has been highlighted by
analysts as one of the most challenging refinancings in the Gulf
Arab region this year, given the size of the maturity and the
firm's limited cash position.
Earlier this month, the company said it was "committed" to
the sukuk repayment and was in final talks with banks and
management for a bank financing agreement.
(Editing by Amran Abocar)