debt transaction is one of the few deals keeping investment
bankers busy in the Gulf as the global coronavirus outbreak
slams the brakes on capital markets activity.
Dubai last month said that state company Port and Free Zone
World (PFZW), part of Dubai World, planned to buy publicly
listed shares of DP World in a deal with a $13.9 billion
Citi <C.N> and Deutsche Bank <DBKGn.DE> underwrote $9 billion in
loans for the transaction and immediately started talks with
other banks to distribute the debt, sources told Reuters at the
This week a group of 10 banks, including Citi and Deutsche,
signed commitments that covered and oversubscribed the $9
billion debt deal, said two sources close to the deal.
The other eight banks are Bank of Nova Scotia <BNS.TO>, Credit
Agricole <CAGR.PA>, Emirates NBD <ENBD.DU>, First Abu Dhabi Bank
<FAB.AD>, HSBC <HSBA.L>, JPMorgan <JPM.N>, Samba Financial Group
<1090.SE> and Standard Chartered <STAN.L>, one of the sources
The transaction involves a $3 billion five-year loan, with the
rest of the financing comprising shorter-term debt, the source
DP World, Citi, Deutsche Bank, Emirates NBD, JPMorgan, and
Standard Chartered declined to comment while the other banks and
the Dubai department of finance did not immediately respond to
requests for comment.
The planned delisting of DP World will add to its leveraging,
which last month pushed ratings agencies Moody's and Fitch to
place the company under review for a potential downgrade.
As part of the deal, DP World will borrow $5.15 billion to fund
a dividend to Dubai World, which is the sole shareholder of PFZW,
helping it meet outstanding obligations to lenders.
Dubai World, a conglomerate with interests in ports, real estate
and hospitality, signed a $25 billion debt restructuring
agreement in 2011 after Dubai was hit by the global financial
The jumbo $9 billion loan deal was marketed to banks amid
increasing concerns over the economic impact of coronavirus on
Dubai, a Middle East trade, transportation and tourism hub.
Two banks that were asked to commit to the transaction did not
participate, one of the sources said without naming the banks.
The loans will be sold over the coming weeks to a wider group of
banks, both sources said.
(Reporting by Davide Barbuscia; Editing by David Goodman)
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