Abu Dhabi Commercial Bank (ADCB) has offered AED950m ($258m) loan to local developer National Investment Corporation (NIC) to partially finance the new Fairmont hotel complex being constructed in Abu Dhabi.
The Executive Vice President and General Manager of ADCB, Abu Dhabi said that the contract is part of a thread of hotel financings as well as new boutique hotels and renovation work that the bank is looking close in the coming months.
The 10-year working capital loan is the first of its kind to be agreed between the bank and NIC, with the developer preferring to raise bank financing as a more competent way to organize its capital.
The deal is project finance as it has been raised only to sustain the costs related to the hotel complex, ranging from cost of construction, marketing or hiring new personnel. The pricing on the deal was fine within the market norms however there is a chance NIC could refinance the deal after the construction has been completed which is due to take place in 2016.
The developer would also have to demonstrate that can attract the number of residents and tourists needed to generate the income level forecast, before it considers refinancing.