Dubai's Atlantis resort has refinanced an $880-million loan to take advantage of favorable market conditions and secure a better interest rate, the company told Reuters and as reported by Arabia Business. The loan was also increased in size to $1.1 billion.
The facility is the latest example of state-linked entities in the emirate using improved market sentiment toward Dubai and the high amount of cash in the local banking system to lower their borrowing costs, often on loans which still had much of their existing lifespan remaining, Arabian Business writes.
Atlantis' new seven-year loan will pay an interest rate of 375 basis points over the London interbank offered rate (Libor), one of the banking sources said. This is down from the 500 bps paid on the original five-year loan signed in September 2013.
"In line with common market practices, we refinanced the loan to take advantage of the favourable market conditions," said a spokesman for Investment Corporation of Dubai (ICD), the sovereign fund which acquired Atlantis in December 2013.