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Dubai completes $800M road toll financing deal- MEED
Dubai closed a $800 million financing deal with lenders based on securitising road toll receipts, receiving a strong response from lenders - MEED
July 12, 2011 2:06 by p.deleon
Dubai closed a $800 million financing deal with lenders based on securitising road toll receipts, London-based Middle East Economic Digest (MEED), reported on Tuesday.
The loan, which will be used to fund infrastructure projects, received a strong response from lenders, bringing margins down to 325 basis points above the London Interbank Offered Rate (LIBOR), MEED said.
Citibank, Commercial Bank of Dubai, Emirates NBD and Dubai Islamic Bank were the mandated lead arrangers and book-runners for the financing, which includes a conventional and an Islamic tranche.
Dubai launched its Salik electronic toll collection system in 2007 to ease congestion in the regional trading hub, which now has some 1.9 million inhabitants, and generate more income for the emirate, which lacks the oil wealth of neighbouring Abu Dhabi.
The emirate’s Roads and Transport Authority, which operates Salik, was projected to contribute some 3.4 billion dirhams ($925.7 million), or 11.5 percent of last year’s budget income. The actual Salik contribution has not been made public. (Reporting by Shaheen Pasha; Editing by Dinesh Nair)