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Overview

ICBC Middle East contributes $100 million USD to a $635 million USD syndicated loan to refinance an existing loan for the Government of Dubai

Commitments (Constant USD, 2023)$138,731,777
Commitment Year•2009Country of Activity•United Arab EmiratesDirect Recipient Country of Incorporation•United Arab EmiratesOverseas Jurisdiction•United Arab EmiratesSector•Government And Civil SocietyFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Apr 1, 2009
First repayment (originally scheduled)
Apr 1, 2010
Last repayment (originally scheduled)
Mar 31, 2012

Geospatial footprint

Map overview

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The project is providing a loan to refinance an existing loan for the Government of Dubai. The specific organ within the Government that received the loan is unknown. More detailed locational information can be found at: https://www.openstreetmap.org/relation/4479752

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (Middle East) Limited (ICBC Middle East)

Cofinancing agencies

Private Sector

  • Commercial Bank of Dubai PSC (CBD)
  • Dubai Islamic Bank PJSC (DIB)
  • Mashreqbank PSC
  • Noor Bank PJSC (Formerly Noor Islamic Bank)

State-owned Banks

  • Emirates NBD Bank P.J.S.C.
  • Union National Bank (UNB)
  • WestLB AG

Receiving agencies

Government Agencies

  • Government of Dubai

Loan desecription

2009 syndicated $635 million USD loan from ICBC Middle East and others to refinance an existing loan for the Government of Dubai in the UAE

Grace period•1 yearsInterest rate (t₀)•4.133%Interest type•Variable Interest RateLoan tenor•3-month rateMaturity•3 years

Narrative

Full Description

Project narrative

In April 2009, a syndicate of eight banks — including the Industrial and Commercial Bank of China (Middle East) Limited (ICBC Middle East) — signed a $635 million USD (AED 2.3 billion) loan agreement with the Government of Dubai to help refinance an existing Ijara facility borrowed by Dubai maturing in April 2009. The $635 million USD was structured as a lease agreement in accordance with Islamic finance principles. The financing was a multi-currency broken into three tranches with floating rates: a tranche of AED 1.7 billion, a tranche of $100 million USD, and a tranche of €52 million EUR. The loan carried a grace period of one year and a maturity period of three years. It was to be repaid in three equal semi-annual installments beginning in April 2010 with a final maturity in April 2012. The loan carried an interest rate of 3-Month LIBOR plus a margin of 3%. ICBC Middle East contributed $100 million USD to this facility. In addition to ICBC, the following financial institutions participated in this syndicated loan: Dubai Islamic Bank PJSC (DIB), Emirates NBD P.J.S.C., Noor Islamic Bank, Mashreqbank PSC, Union National Bank (UNB), the Commercial Bank of Dubai (CDB), and WestLB. DIB, Emirates NBD, Noor Islamic Bank, ICBC, and WestLB served as the Mandated Lead Arrangers (MLAs) and bookrunners, while DIB served as facility coordinator. The proceeds of the loan were to be used by the borrower to partially repay the outstanding obligations (worth $1 billion USD) of the Government of Dubai’s Department of Civil Aviation. The Government of Dubai originally intended to refinance the entire $1 billion USD debt from lending, but it failed to raise the full amount on the bank amount, so it provided the remaining $365 million USD from state funds to do so. Dubai’s Department of Civil Aviation (also known as Dubai Civil Aviation) had borrowed to fund the Dubai International Airport's $4.5 billion USD expansion, including Terminal 3. This loan was reportedly the first instance of ICBC Middle East participation in Middle East local syndication and Islamic finance.

Staff comments

1. This loan carried an interest rate of 3-Month LIBOR plus a 3% margin. Therefore, to estimate the interest rate, AidData has coded the interest rate as the average 3-Month LIBOR rate for April 2009, 1.133%, plus 3%, or 4.133%.