Tabreed $692m loan syndication to finance stake in district cooling
The syndication is part of Tabreed’s acquisition funding of an 80% stake in Emaar’s Downtown Dubai district cooling business
Dubai Financial Market-listed district cooling developer National Central Cooling Company (Tabreed) has successfully closed syndication of a landmark term-loan facility, which was pre-funded by HSBC Bank Middle East Limited (HSBC) in March 2020, as part of the company’s acquisition funding of an 80% stake in Emaar Properties’ (Emaar) Downtown Dubai district cooling business.
The $692m loan has a tenor of 5 years – until March 2025 – and was structured as a multi-tranche syndicated facility with Islamic and conventional tranches.
Against a backdrop of unprecedented market conditions and related loan market volatility and price dislocation, the syndication was successfully closed and over-subscribed by a diverse group of nine international, regional, and local banks.
In addition to financing the acquisition of Tabreed’s stake in the Downtown Dubai district cooling business, the syndicated facility will also support the development of a new state-of-the-art district cooling plant in Downtown Dubai.
The Downtown Dubai district cooling scheme currently provides 148,471RT of contracted capacity through a network that distributes chilled water produced in three existing interconnected district cooling plants.
Commenting on the successful syndication of the facility, the chief executive officer at Tabreed, Bader Al Lamki, said: “The successful syndication of this loan facility underscores Tabreed’s strong business fundamentals, the solid relationships with our key partnering banks and the confidence the financial markets have in our expansion projects, both in Dubai and across the region.”
The chief financial officer at Tabreed, Adel Salem Al Wahedi, said: “This syndication demonstrates the strong partnerships we have with all our existing relationship banks who have been key stakeholders of the company over the past several years.
“In line with other utility infrastructure companies, we recognise the role of strong financial institutions as a key pillar to success, and we look forward to future collaboration opportunities.”
HSBC and ADIB acted as Joint Underwriters, Bookrunners, Initial Mandated Lead Arrangers as well as Global Facility Agent and Investment Agent, respectively, for the facility.
Emirates NBD Capital Limited and Samba acted as Mandated Lead Arrangers on the facility. The facility represents a milestone syndicated facility in support of a major acquisition by a government-related entity in 2020 and marks Tabreed’s successful return to the syndicated market.
Following the completion of the Downtown Dubai district cooling transaction, Tabreed’s presence in Dubai increased to 278,801 RT and its total capacity increased by 13.5% to 1,342,574 RT from 83 plants.
Tabreed currently delivers more than 1.342 million refrigeration tons to key developments, including landmarks such as the Burj Khalifa, Dubai Opera, The Dubai Mall, Sheikh Zayed Grand Mosque, Al Maryah Island, Yas Island and Ferrari World Abu Dhabi, among others.