Dubai World Unit, Port And Free Zone World, Completes $1.1bn Loan

Port and Free Zone World (PFZW), the majority owner of listed Dubai-based ports operator DP World, has completed a deal to borrow $1.1 billion, a company spokesman said on Wednesday.

He declined to comment further.

Earlier banking sources had said the five-year loan would be used to help the company meet commitments at the group and subsidiary levels.

PFZW is part of Dubai World, which is currently close to securing a renegotiation of terms on $14.6 billion of debt that was originally restructured in 2011.

Citigroup, Emirates NBD and HSBC arranged the loan and were joined by a group of seven other banks, two Dubai-based sources said.

The additional lenders were Dubai Islamic Bank, Barwa Bank, Commercial Bank of Dubai, Mashreq , Noor Bank, Standard Chartered and Union National Bank.

Dubai companies have used a strengthening economy and high levels of liquidity in the banking system to tap the loan market over the past 18 months to refinance existing debt, often at significantly cheaper rates.

The new loan is priced at 2.25 percentage points over the London interbank offered rate (Libor), the two Dubai-based banking sources said.

The ports group was last in the market in September 2011 when it closed a $850 million five-year loan at a margin of 3.5 percentage points over Libor, according to Thomson Reuters data.

PFZW formally completed the sale of its unit Economic Zones World to DP World on Tuesday, a deal seen as providing cash to parent Dubai World to help meet its debt repayment schedule.