Saturday, Apr 4, 2020
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10 banks commit $9 bn in loans as a part of DP World debt deal

DP World loans
The group of 10 banks includes Credit Agricole, Emirates NBD, First Abu Dhabi Bank, HSBC, JPMorgan, and Standard Chartered

Around 10 banks have committed $9 billion in loans to take full control of port operator DP World and refinance the debt of state investment vehicle Dubai World, the media reported.

Port and Free Zone World, a subsidiary of Dubai World, has decided to buy publicly listed shares of DP World.

Reportedly, Citi and Deutsche Bank underwrote $9 billion in loans for Port and Free Zone World to acquire shares in DP World. Soon, the two banks began signing up partners to distribute the debt finance.

The other banks involved in the DP World and Dubai World debt finance deal includes Bank of Nova Scotia, Credit Agricole, Emirates NBD, First Abu Dhabi Bank, HSBC, JPMorgan, Samba Financial Group and Standard Chartered.

According to media reports, DP World will borrow $5.15 billion to fund a dividend to Dubai World, which is the sole shareholder of Port and Free Zone World. The loans, then will be sold to a wider group of banks in the coming weeks.

The de-listing of DP World from Nasdaq Dubai has forced credit rating agency Moody’s to put the firm under review for a potential downgrade.

In a statement, Moody’s said, “The sizable dividend payment to Dubai World breaks our current assumption that DP World’s credit profile is unaffected by the debt burden at the level of Dubai World.”

However, DP World believes the de-listing will help the company fulfill its ambition of becoming the world’s leading end-to-end logistics provider.

In the last one year, DP World has invested significantly in logistics assets all over the world to fulfill its ambition. Earlier this year, the port operator acquired a 44 percent stake in container terminal operator Swissterminal Holding.

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