Middle East’s largest port initiates rare private debt deal

By Silas Brown and Nicolas Parasie (Bloomberg) —

Pension manager Caisse de Dépôt et Placement du Québec funded its stake in a port in Dubai with $900 million in private debt, opening up an under-exploited market for business in the Middle East.

Citigroup Inc. and JPMorgan Chase & Co. arranged the private bond sale, according to people with knowledge of the deal, who declined to be identified because they are not authorized to discuss the matter.

The debt will primarily be used to refinance bridge loans set up to fund CDPQ’s 21.9 percent stake in the company that controls Jebel Ali Port – the largest in the Middle East – and two industrial estates, the authorities said Persons.

Montreal-based CDPQ approved last year invest $5 billion in the three assets through a joint venture, DP World Jebel Ali Terminals and Free Zone FZCo. The rating agency Moody’s assigned a Baa3 rating to the proposed Senior Secured Notes in February this year. The Notes were issued by a special purpose vehicle indirectly owned by CDPQ.

The deal came about as Dubai sold stakes in some of its most valuable assets. Jebel Ali Port has helped transform the city into a global trading hub and is majority owned by the state-controlled DP World Ltd.

CDPQ, Citigroup, JPMorgan and DP World all declined to comment.

The deal’s geography is striking in a private debt market typically dominated by US, European and Australian companies. The transaction reportedly raised demand of up to $1.5 billion from institutional investors, which typically include insurance companies, pension funds and wealth managers.

© 2023 Bloomberg LP

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