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Zain Said to Work With Six Banks on $1.5 Billion Loan

(Corrects sixth paragraph of article published Nov. 29 to show credit line was retired.)

Nov. 29 (Bloomberg) -- Mobile Telecommunications Co., the Kuwaiti phone company known as Zain, is working with six banks to raise $1.5 billion of loans to refinance debt, according to three people with knowledge of the situation.

Citigroup Inc., BNP Paribas SA, Credit Agricole CIB, Standard Chartered Plc, WestLB AG and National Bank of Kuwait are helping Zain arrange the financing, said the people, who declined to be identified because the discussions are private.

Zain spokesman Antoine Abou Khalil declined to comment.

Chief Financial Officer Ossama Matta said in September the company was considering options for a $1.5 billion credit line to refinance debt at lower rates.

Zain last year signed a $610 million two-year Islamic loan that offers lenders a return of 425 basis points more than the London interbank offered rate, according to data compiled by Bloomberg. In Islamic financing, investors earn a predetermined return instead of interest, which is forbidden under Shariah law.

The company prepaid a $4 billion credit line ahead of its renewal date next year, according to its third-quarter financial results.

Three-month Libor is an average of rates set daily by banks and used as a borrowing benchmark. A basis point is 0.01 percentage point.

To contact the reporter on this story: Karen Eeuwens in London keeuwens@bloomberg.net.

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net.

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