DUBAI: DP World Ltd., the world’s third-largest port operator, have asked lenders to cut the price on a five-year credit facility by a third to benefit from falling interest rates, two bankers familiar with the request said.
The port operator, owned by Dubai World, one of the emirate’s three main state-controlled holding companies, is seeking a reduction to 150 basis points, or 1.5 percentage points, over the London interbank offered rate, the bankers said, asking not to be identified. That’s down from 225 basis points when the loan was raised in 2012, according to data compiled by Bloomberg.
The Dubai-based company also asked lenders to triple the revolving credit facility’s size to $3 billion as it seeks to benefit from lenders’ excess cash, according to the bankers. DP World undertakes an annual review of its banking facilities as part of active financial management, it said in an email Sunday. Reuters reported DP World’s request on April 24.
Some companies in Dubai, which was near default in 2009, are taking advantage of the emirate’s improving credit profile to drive down loan costs. Jebel Ali Free Zone FZE, a business park operator, negotiated a 1.25 percentage point cut on a $1.2 billion Islamic loan in October.
A version of this article appeared in the print edition of The Daily Star on April 28, 2014, on page 5.