Mubadala in talks with banks on $2bn syndicated loan deal

The loan will be one of the first for a Gulf-based company since Dubai shocked world markets requesting a standstill on Dubai World's $26bn of debt.

LONDON // Mubadala Development, the strategic investment arm of the Abu Dhabi Government, is in talks with banks to refinance a US$2 billion (Dh7.34bn) syndicated loan that matures in April, banking sources close to the deal say. The loan will be one of the first for a Gulf-based company since Dubai shocked world markets on November 25 when it requested a standstill on $26bn of debt owed by the state-owned conglomerate Dubai World.

Mubadala is 100 per cent Government-owned and can call on its close relationship with banks to agree a new deal, the bankers said. "Mubadala is doing the rounds and looking for a refinancing plus a potential increase - it will be largely self-arranged, with Mubadala dictating pricing," one of the bankers said. Talks are centred around the issue of pricing, which will set a new benchmark for syndicated loans in the Gulf region, another banker said.

The original deal was a $2bn, three-year club loan signed in April 2007 with 21 banks involved. It paid a margin of 17.5 basis points over the London interbank offered rate, Reuters data show. * Reuters