DUBAI, June 9 Abu Dhabi's Emirates Steel has obtained $1.3 billion in credit facilities, becoming one of a string of United Arab Emirates firms to lower its cost of borrowing as a strong economy encourages cash-flush banks to lend at low rates.
The facilities, secured from 19 local and foreign banks, will be used to refinance an existing $1.1 billion facility and purchase assets, the company said on Monday.
"The company has been able to significantly reduce its borrowing costs and drive the pricing down. We have also extended the loan tenor to eight years, which allows us more flexibility in managing our financial resources," the steelmaker's chairman Hussain al-Nowais said, without specifying the pricing terms of the new facilities.
In March, when the refinancing deal was being put together, banking sources told Reuters that Emirates Steel had succeeded in reducing the margin it paid on its borrowing to around 160 basis points over the London interbank offered rate (Libor) from about 200 bps.
Emirates Steel plans to spend $263 million on acquiring steel assets from its parent General Holding Corp (Senaat), an Abu Dhabi state holding company, as part of a consolidation designed to make the firm more competitive. (Reporting by Archana Narayanan; Editing by Andrew Torchia)