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DEWA in $2.2b Ijara Financing Deal

DUBAI - Dubai Electricity and Water Authority has reached a deal with 18 banks for a borrowing facility of $2.2 billion to meet its commitment of refinancing its loan ahead of due date, banking sources said.

The state-owned utility company, also called DEWA, is expected to announce today details of the syndicated Islamic financing deal — Ijara or leasing — being coordinated by Emirate NBD, Dubai Islamic Bank, National Bank of Abu Dhabi and Standard Chartered Bank.

Sources close to the deal was quoted by Reuters on Tuesday as saying that the facility was being provided with a margin of 300 basis points, which is 10 times the margin paid on the original Ijara raised in April 2007. “The new financing has a three-year maturity and will carry an irrevocable payment guarantee from the government.”

The refinancing by DEWA, which is rated ‘A1’ by Moody’s and ‘A+’ by Fitch, comes close on the heels of a $600 million Ijara raised by Dubai Department of Civil Aviation to repay its $1 billion debt.

In February this year, Borse Dubai, the state-owned holding company of Nasdaq Dubai, raised a $2.5 billion loan to refinance part of a $3.4 billion facility. With the latest on-time repayment of debt by a government entity, Dubai now will be left with a total of $8 billion in debts due for repayment this year.

DIFC Investments also repaid its $500 million syndicated loan facility before its maturity on December 5, 2008.

issacjohn@khaeejtimes.com