Abu Dhabi’s ADQ boosts liquidity with up to $ 3 billion club loan
LONDON, July 3 (LPC) – Abu Dhabi state-owned holding company ADQ is seeking a loan of $ 2-3 billion, which is expected to be provided by a club of international lenders, according to banking sources.
This is the first club loan from international banks to ADQ and is part of a larger fundraising campaign to boost the liquidity of the company, which owns some of the most important non-oil assets in ‘Abu Dhabi, the bankers said.
The deal is self-organized by the ADQ and is expected to involve a group of five or six banks, the bankers said. The borrower was originally looking for a five-year term, but is likely to end up with three years.
“Five years would be a bit of a stretch, I think three years is more likely,” said one banker.
Banks want to deploy liquidity in Abu Dhabi, the largest emirate in the United Arab Emirates, rated AA by S&P and Fitch and Aa2 by Moody’s, but the prices are very tight, meaning all lenders except a handful will be excluded.
“The appetite for an Abu Dhabi deal like this is not limited to the five or six banks that will eventually close the deal, but they are the only ones that can afford it. This is where everyone wants to be, but the borrower has high price expectations, ”a second banker said.
Along with the club loan, ADQ, formerly known as the Abu Dhabi Developmental Holding Company, also raised a number of bilateral jumbo loans denominated in dirhams in local currency.
“There are certainly two bilateral agreements being discussed and it could end up being three. One of them is more important than the club loan, ”said the second banker.
The ADQ did not respond to a request for comment.
ADQ¸, chaired by Sheikh Tahnoon Bin Zayed Al Nahyan, is raising funds to bolster the funds of its existing holding companies, the second banker said. They include some of the UAE’s largest assets, including the Abu Dhabi Stock Exchange, Abu Dhabi Airports, and Senaat, one of the UAE’s largest industrial investment holding companies.
“They now have a number of critical government entities reporting to them. They don’t need immediate support, but I guess having and keeping cash is essential for when they might need it and to help any businesses that might have suffered from Covid, ”he said. -he declares.
Cash may also be needed to fund ADQ’s ongoing wave of acquisitions. In March, it acquired a 50% stake in Abu Dhabi-based agricultural company Al Dahra Holding, and is among the bidders of Jordanian food producer Al Jazeera Agriculture Company. It is also in the process of acquiring the Jordanian company Al-Nabil Food Industries, which produces frozen foods.
ADQ was established in 2018 and has a portfolio of 90 assets across 11 sectors of Abu Dhabi’s non-oil economy, including media, utilities, real estate, healthcare, transport and tourism. (Edited by Christopher Mangam)