Emaar Properties gets $1.5b loan from First Abu Dhabi Bank

DUBAI: Dubai-based Emaar Properties obtained a $1.5 billion corporate finance loan from First Abu Dhabi Bank, sources familiar with the matter said on Sunday.

Emaar, which develops residential properties, hotels, entertainment and shopping malls, agreed on the financing after initially holding talks with some of its relationship banks for three bilateral loans of $500 million each.

In the end, it chose to obtain a single loan of $1.5 billion with First Abu Dhabi Bank underwriting the whole amount, said the sources, declining to be named as the matter is not yet public.

The company, which is also planning an initial public offer of up to 30 per cent of its local real estate development business, said earlier on Sunday that in a board meeting scheduled for Sept. 20, it would discuss its entry into a new financing agreement with First Abu Dhabi Bank. It did not specify any terms of the agreement.

A spokeswoman for Emaar declined to comment, while First Abu Dhabi Bank did not respond to a request for comment.

The loan, with a five-year tenor, pays a margin of 135 basis points over London interbank offered rates, said one of the sources.

Given the large size of the facility, it’s possible that First Abu Dhabi Bank will try to sell it down in the secondary market, the sources said. Emaar Properties plans to launch the IPO of its local real estate development business by November, its chairman Mohamed Alabbar said in June. First Abu Dhabi Bank is set to have a leading role in arranging the planned IPO together with Bank of America Merrill Lynch and Goldman Sachs, sources told Reuters last month.