Banks in the United Arab Emirates began marketing to other lenders a $850 million loan made to the Investment Corporation of Dubai for the construction of a hotel complex on Dubai’s Palm Jumeirah, according to two bankers with knowledge of the deal.
Emirates NBD PJSC, Dubai’s biggest bank, Dubai Islamic Bank PJSC and Abu Dhabi Commercial Bank PJSC are providing the loan to build a second Atlantis resort on the man-made island, the people said, asking not to be identified because the information is private. The dirham portion of the 10-year loan is priced at 295 basis points over the benchmark rate and the dollar portion at a spread of 320 basis points, they said.
Dubai, the Gulf’s tourist and business hub, is pushing ahead with construction projects even as economic growth in the region slows amid the slump in crude prices. Investment Corporation of Dubai, the emirate’s main state-owned holding company, and Kerzner International Holdings Ltd., a developer and operator of resorts and luxury hotels, plan to spend $1.4 billion to build The Royal Atlantis Resort and Residences. The development will comprise nearly 800 guest rooms and 250 luxury residences.
The loan will have a duration of 10 years and should be signed by the end of May, the people said. Repayments will start after three years once the construction of the hotel is completed and it has started operating, the people said.
An ICD spokesman didn’t respond to a phone call or e-mail seeking comment, while spokesman for Emirates NBD and ADCB declined to comment. DIB didn’t respond to requests for comment.