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CASE STUDY: Ezdan Draws Out Tenors with US$460mn Syndication

Ezdan Holding Group, Qatar’s largest privately-owned real estate developer, raised US$460mn through a competitively priced syndication in a bid to help refinance existing maturities and extend the tenor of existing debt.

May 22, 2017 // 4:27PM

Background

In the fourth quarter of 2016, Ezdan Holding Group sought out fresh liquidity in a bid to refinance existing maturities, smooth out repayments, and extend average tenors on its liabilities.

The effort culminated in the company securing a US$460mn 8-year syndicated loan, Ezdan’s third syndication, at competitive pricing relative to its most recent transactions.

Transaction Breakdown

On the back of two successful syndications aggregating to US$1bn in 2014 and 2015, and a successful benchmark Sukuk issuance for US$500mn completed in May 2016, Ezdan Holding Group hit the loan syndication market in a bid to capitalise on the company’s strong momentum, initially seeking a targeted transaction size of US$300mn.

The facility contained a greenshoe option and was upsized off the back of strong lender appetite, leading the transaction to close at US$460mn with a 21-month grace period, with the mandated lead arrangers taking the largest allocations. A strong subscription rate – about 1.53 times – allowed some lead arrangers the opportunity to pare back their exposures.

The transaction priced at 3MLIBOR+340bp, in line with pricing on the company’s landmark sukuk transaction in May 2016. Dubai Islamic Bank, HSBC, and Mashreq Bank each took the largest allocations (US$75mn), while Emirates NBD and UNB each took US$50mn allocations.

Ahli United Bank and the National Bank of Ras Al-Khaimah each took US$35mn allocations, while ICBC, the Bank of Bahrain and Kuwait, and UBL each took US$30mn, US$20mn, and US$15mn, respectively.

Overall, the syndication helped extend the tenor of Ezdan Holding Group’s liabilities, and helped bolster the company’s relationship with new regional lenders – diversifying the company’s investor base. 

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