DP World Ltd., the world’s third-biggest port operator, asked lenders to cut the price on a five-year credit facility by a third to benefit from falling interest rates, two bankers familiar with the request said.
The port operator, owned by Dubai World, one of the emirate’s three main state-controlled holding companies, is seeking a reduction to 150 basis points, or 1.5 percentage points, over the London interbank offered rate, the bankers said, asking not to be identified because the information is private. That’s down from 225 basis points when the loan was raised in 2012, according to data compiled by Bloomberg.
The Dubai-based company also asked lenders to triple the revolving credit facility’s size to $3 billion as it seeks to benefit from lenders’ excess cash, according to the bankers. DP World undertakes an annual review of its banking facilities as part of active financial management, it said in an e-mail today. Reuters reported DP World’s request on April 24.
Several companies in Dubai, which was on the the brink of default in 2009, are taking advantage of the emirate’s improving credit profile to drive down loan costs. Jebel Ali Free Zone FZE, a business park operator, negotiated a 1.25 percentage point cut on a $1.2 billion Islamic loan in October, while airport retailer Dubai Duty Free was able to reduce the interest rate on a $1.75 billion loan last July.