The cooling company Tabreed has refinanced Dh2.6 billion of debt, becoming the latest in a string of UAE blue-chip firms to take advantage of low interest rates.
The Abu Dhabi-based utility, which provides cooling services for a wide range of property projects, business districts and tourist developments in the UAE and the wider GCC, yesterday announced the signing of three new loans.
“As a result of Tabreed’s robust utility business model, which is anchored in long term, stable and recurring revenue streams, we have taken the opportunity to refinance our existing debt and strengthen our balance sheet,” said Jasim Husain Thabet, Tabreed’s chief executive.
“The new terms in the agreement are yet another endorsement of our company’s financial strength and positive future outlook.”
The refinancing consists of a Dh692 million senior-term loan maturing in December 2018, a Dh1.45bn senior-term loan maturing in March 2021, and a Dh450m revolving credit with a maturity date of March 2021.
ADCB, FGB and Mashreq Bank acted as lead arrangers for the loans.
“What Tabreed have done today is what we were expecting them to do last year,” said Sanyalak Manibhandu, the manager of research at NBAD Securities. “It makes a lot of sense, and it also extends their maturities.”
Tabreed's refinancing follows a string of similar agreements struck by the likes of Taqa, Aldar and du last year, as larger corporate entities took advantage of lower interest rates to press for more favourable terms from lenders.
“There are still opportunities for borrowers in the corporate sector to refinance at lower costs, and we expect them to continue to do so going forward,” said Mr Manibhandu.
Tabreed owns and operates 67 district cooling plants, providing cooling to projects including Yas Island, the Dubai Metro, and the Pearl Qatar.
The company's shares were the only gainer on the Dubai Financial Market, finishing the day up 2.8 per cent at Dh1.10 each.
jeverington@thenational.ae
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