May 28 (Bloomberg) -- Mashreqbank PSC, the Dubai-based lender owned by the billionaire Al Ghurair family, plans to raise about $500 million from a three-year loan as it seeks funds to expand, three bankers familiar with the plan said.
Bank of America Corp.’s Merrill Lynch unit and Australia & New Zealand Banking Group Ltd. are helping coordinate the fundraising with five other banks also expected to participate, one of the people said, asking not to be identified because the information is private. Mashreqbank is targeting a price for the loan of 125 basis points, or 1.25 percentage points, over the London interbank offered rate, according to the person.
Middle East companies are turning to loans to raise funds to benefit from a cash surplus at banks. Emaar Properties PJSC, developer of the world’s tallest skyscraper in Dubai, is raising a $1.5 billion Islamic loan, according to three people familiar with the matter, and Commercial Bank of Qatar QSC, the Persian Gulf country’s second-biggest bank, raised $1 billion in February after initially seeking $600 million.
Mashreqbank’s profit jumped 38 percent last year to 1.8 billion dirhams ($490 million) as lending increased 22 percent to 50.4 billion dirhams in the same period, the company said in January. A spokeswoman for Mashreqbank didn’t respond to a phone call and an e-mail seeking comment today. A spokesman for Merrill Lynch in Dubai declined to comment as did a Sydney-based spokeswoman for ANZ.
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