Dubai Firms to Get $3 Billion as Lending Improves, Bankers Say

Dubai state-owned firms will raise almost $3 billion in loans this month amid signs that lending conditions are improving.

Dubai Electricity & Water Authority will get $2.2 billion in a multicurrency loan at an annual interest rate of 300 basis points more than the interbank offered rates to refinance existing debt, said two bankers, who declined to be identified because the negotiations are private. Dubai Civil Aviation Authority is likely to receive $650 million to repay $1 billion in maturing debt, the bankers said.

“Investors are keeping a very close eye to see how much the appetite is for lending money to Dubai,” said Nish Popat, the Dubai-based head of fixed income at ING Investment Management. “If they are able to roll over fully 100 percent then that will be looked at very positively because appetite to lend to the region has potentially returned.”