Investment Corp of Dubai Plans $2 Billion Loan to Repay Debt

Investment Corporation of Dubai, the emirate’s main state-owned holding company, said it plans to raise $2 billion from a syndicated loan to refinance debt.

The facility will include both conventional and Islamic portions and have a tenor of five years, the company, known as ICD, said in an e-mailed statement today. The funds will go toward repaying the $2 billion five-year portion of an original $6 billion loan raised in August 2008, ICD said. That facility’s $4 billion three-year tranche was settled in August 2011.

Abu Dhabi Commercial Bank PJSC, Citigroup Inc., Commercial Bank of Dubai PSC, Emirates NBD PJSC and HSBC Holdings Plc will help arrange the conventional funding, while Abu Dhabi Islamic Bank PJSC, Dubai Islamic Bank PJSC and Standard Chartered Plc will oversee the Shariah-compliant segment, ICD said.

ICD was set up in May 2006 and holds stakes in more than 30 companies, including Emirates, the world’s biggest airline by international passenger traffic, and Emirates NBD, the United Arab Emirates’ biggest bank by assets. The company will host a meeting with banks in the week starting March 24, it said.

Dubai’s borrowing costs have dropped as the city’s tourism, hotel and restaurant industries recover from a 2008 property market crash that sent home prices plunging. The economy may have expanded 5 percent in 2012, the fastest pace since 2007, according to government estimates.

The yield on the government’s $750 million of 7.75 percent bonds due October 2020 was 4.02 percent at 6:37 p.m. in Dubai, down 230 basis points, or 2.30 percentage points, in the past year, according to data compiled by Bloomberg. Dubai raised $1.25 billion in January from the sale of 10-year sukuk and its first 30-year bonds.