DUBAI, Feb 25 (Reuters) - Abu Dhabi state fund Aabar Investments is close to securing a loan worth almost 4 billion euros ($4.4 billion) to refinance existing debts, three sources aware of the matter told Reuters on Thursday.
The loan is due to run for five years and will replace a number of existing borrowings, including a $2.5 billion facility which is due to mature in April, according to the sources who spoke on condition of anonymity as the information isn’t public.
Pricing on the deal is around 180 basis points over benchmark rates, according to one of the sources, with the other two sources stating that the borrowing rate was sub-200 bps.
Aabar, with stakes in companies including UniCredit , Dubai-listed builder Arabtec and Richard Branson’s Virgin Galactic, wasn’t immediately available to comment.
Such a large transaction denominated solely in euros is rare for a Gulf borrower, with regional firms preferring to borrow in local currency or in dollars, to which their home currencies are pegged.
However, Aabar could take advantage of significant euro liquidity, aided by the money printing programme of the European central bank, because many of its assets are located on the continent.
The $2.5 billion loan which the new financing will replace was also partly-denominated in euros, as well as dollars and UAE dirhams. Among the banks to have backed that loan were Bank of America-Merrill Lynch, HSBC, JP Morgan and National Bank of Abu Dhabi, according to Thomson Reuters data.
The new loan is being supported by its parent company, International Petroleum Investment Co (IPIC), sources told Reuters last month without divulging the nature of support.
Aabar manages a portfolio of investments spanning real estate to aerospace and financial services to energy. ($1 = 0.9074 euros) (Editing by Elaine Hardcastle)