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)