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Middle East’s Biggest Port Prompts Rare Private Debt Deal

Bloomberg
Total Views: 1278
May 5, 2023

By Silas Brown and Nicolas Parasie (Bloomberg) —

Pension manager Caisse de Dépôt et Placement du Québec financed its stake in a Dubai port with $900 million in private debt, tapping an infrequently-used market for deals 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 as they are not authorized to discuss the matter. 

The debt will be primarily used to refinance bridge loans put in place to finance CDPQ’s 21.9% stake in the entity controlling Jebel Ali Port — the biggest in the Middle East — and two industrial zones, the people said. 

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

The deal was struck as Dubai sold stakes in some of its most prized assets. Jebel Ali Port helped transform the city into a global trade hub and is majority-owned by state-controlled DP World Ltd. 

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

The deal’s geography is notable in a private debt market typically dominated by US, European and Australian businesses. The transaction garnered as much as $1.5 billion in demand from institutional investors, the people said, which typically include insurance companies, pension funds and asset managers. 

© 2023 Bloomberg L.P.

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