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Abu Dhabi’s TDIC Said to Raise $500 Million Loan to Pay Debt

Tourism Development & Investment Co., the state-owned developer of the Louvre and Guggenheim museums in Abu Dhabi, raised a $500 million loan to pay existing debt, according to three bankers with knowledge of the deal.

The five-year facility was obtained from a group of seven banks and pays 1.5 percentage points including fees more than the London Interbank Offered Rate, said the bankers, asking not to be identified because the information is private. The money will help pay a three-year $600 million loan that carries a margin of 1.35 percentage points above Libor, the bankers said.

TDIC cannot comment on the loan, the company said in an e-mailed response to questions from Bloomberg News.

TDIC is one of four Abu Dhabi-owned companies whose debt carries a sovereign guarantee, according to a banker. Abu Dhabi, the richest and biggest of seven states that make up the United Arab Emirates, holds about 6 percent of global oil reserves.

TDIC is building local branches of the Paris and New York museums on Abu Dhabi’s Saadiyat Island, which is being developed as part of the emirate’s push to diversify its economy away from oil. The $27 billion of projects on the island include the Zayed National Museum and a New York University campus, while the company is also building homes and offices on the location.

Mubadala Development Co., another state-backed company in Abu Dhabi, earlier this year paid 45 basis points, or 0.45 percentage points, above Libor on a $2 billion three-year revolving credit facility, according to data compiled by Bloomberg. Interest on the three-year revolving loan may rise to 75 basis points over Libor depending on the amount drawn.

Syndicated loans in the Middle East and North Africa have risen 14 percent this year from the same period a year ago to $42.3 billion, according to data compiled by Bloomberg. HSBC Holdings Plc (HSBA) and Standard Chartered Plc are the biggest arrangers of syndicated loans this year, according to the data.

TDIC also has a five-year $1 billion bond maturing in July and another $1 billion Islamic bond, or sukuk, maturing in October according to data compiled by Bloomberg.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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