(Adds details on loan industry, context)
By Dinesh Nair and David French
DUBAI, Jan 29 (Reuters) - Abu Dhabi's Waha Capital , the largest shareholder in New York-listed aircraft leasing firm AerCap Holdings, plans to raise a $700 million loan mainly to refinance existing debt, three banking sources aware of the matter said.
Waha, in which Abu Dhabi government investment fund Mubadala owns 16 percent, has picked HSBC Holdings and First Gulf Bank to help arrange the five-year loan, the sources said, speaking on condition of anonymity as the information is not yet public.
Most of the cash will be used to refinance a $505 million debt facility maturing in June, with the remainder to be used by the company for corporate purposes, two of the sources said.
Waha plans to complete the loan by the end of February, they said.
A Waha spokeswoman in Abu Dhabi was not available for comment.
The Gulf loan market has begun 2014 with a flurry of activity compared with the more piecemeal starts to recent years, with corporates and state-linked entities taking advantage of the current low interest rate environment to replace more expensive financing taken out during and immediately after the global financial crisis.
Abu Dhabi's Emirates Steel is talking with banks for a $1.3 billion loan to help refinance an existing facility and raise cash to purchase assets from its parent firm.
Meanwhile, Kuwaiti telecom firm Zain is speaking to lenders about a new fundraising ahead of a $867 million loan maturity and Commercial Bank of Qatar is raising a $600 million two-part loan.
Investment banking fees from syndicated lending increased 38 percent to $303 million in 2013, accounting for 42 percent of total Middle Eastern fees, the highest share since 2004, according to Thomson Reuters data.
Waha is eyeing acquisitions worth up to 500 million dirhams ($136.2 million) in the United Arab Emirates' healthcare and education sectors as part of its diversification strategy, its chief executive said in an interview in November.
The firm has also said it will vote in favour of AerCap Holdings' $5.4 billion acquisition of American International Group Inc's aircraft leasing unit.
Waha Capital is AerCap's largest shareholder with a 26.3 percent stake. Should the deal complete, Waha's holding will be reduced to about 14 percent. (Editing by Andrew Torchia and Mark Potter)