Airport retailer Dubai Duty Free has mandated banks for a US$1.1bn multi-tranche loan facility to help fund the expansion of Dubai's international airport, the company said in a statement on Monday.
Citibank along with Dubai Islamic, HSBC and Emirates NBD have been hired to arrange and coordinate the debut international transaction, the company said in an emailed statement.
Abu Dhabi Commercial Bank has already committed to contribute to the loan but will not be involved in arranging it.
DDF, which is owned by Investment Corporation of Dubai (ICD), said the facility includes Islamic and conventional tranches.
Dubai was looking to raise at least US$500m by selling debt based on future revenues at DDF, sources told Reuters last month.
"The purpose of the facilities is to optimise DDF's capital structure in order to support the further development at Dubai International Airport (DIA)," DDF said in the statement.
Dubai, which has clawed back from the depths of a crippling 2009 debt crisis, has been examining ways of raising finances to expand its existing aviation infrastructure after deciding to go slow on a $34 billion new Al Maktoum Airport facility designed to become the biggest in the world.
Its existing airport serves over 50m passengers a year as the emirate attempts to leverage its position at the crossroads of air corridors between continents.
DDF said the syndication was launched on April 5 and banks have been invited to commit in U.S. dollars and UAE dirhams. Presentations would be held in Dubai during the week, it said.
Sales at Dubai Duty Free, which covers a sprawling 18,000 square metres of retail space at Dubai International Airport, rose 15.7 percent to US$1.46bn in 2011.
The operator, which sponsors high-profile sports events such as the Dubai tennis championship and is famous for lavish giveaways, has seen business boom on the back of sales of branded perfumes, watches and designer clothes.
Liquor, including some of the world's most expensive brands, also boosts sales as travellers and expatriates stock up in a country that largely restricts alcohol sales outside of hotels and restaurants.
Duty Free is expected to add an additional 8,000 square metres by the end of 2012.