AD Ports Group, a prominent player in global trade, logistics, and industry, has successfully finalized refinancing agreements with two major UAE banks. This strategic move allows the company to restructure its existing syndicated loan of $2.25 billion, resulting in more favorable financial terms and the potential to save up to AED 44 million (approximately $12 million) in financing costs over the next year.
Financial Benefits
The newly secured financing facilities will provide AD Ports Group with increased flexibility to optimize its return to the debt capital markets. This aligns with the company’s strategy of utilizing bonds as its primary long-term funding source.
Martin Aarup, Group Chief Financial Officer of AD Ports, emphasized the advantages of the refinancing: “The new agreements not only provide greater financial flexibility and significantly lower our financing costs, but they also allow us to strategically time our re-entry into the debt capital markets. This will enable us to capitalize on the current easing interest rate cycle and refinance our debt at longer tenors and competitive rates that align with our capital structure.”
Details of the Refinancing
Under the terms of the new agreements, the existing $2.25 billion syndicated loan, originally obtained in April 2023, has been replaced with an AED 9.2 billion (equivalent to $2.5 billion) medium-term facility, set to mature in 2.5 years. Additionally, the Group has secured a short-term facility of AED 1 billion (around $273 million) with a maturity of 1.5 years.
These refinancing transactions come on the heels of the U.S. Federal Reserve’s decision to initiate an interest rate easing cycle, marking its first rate cut since March 2020. The new lending facilities also extend the maturity of AD Ports Group’s debt to 2026 and beyond, enhancing its financial stability.
Conclusion
This refinancing agreement positions AD Ports Group for continued growth and strategic financial management, allowing the company to better navigate the evolving landscape of global finance and trade.
