Linked to the guaranteed financing rate per night
Emirates Aluminum agrees to a revolving credit facility
Emirates Global Aluminium, announced its approval of a revolving credit facility linked to a guaranteed overnight financing rate.
In a statement, it stated that the guaranteed overnight financing rate is the emerging alternative to the US dollar interbank lending rate (LIBOR), which has been an approved standard for global lending for decades.
The company added that after this deal, Emirates Global Aluminium became one of the first companies to adopt joint credit facilities for companies in the Middle East, compatible with the one-night guaranteed financing rate as a pricing criterion, which depends on the forward exchange rate for the one-night guaranteed financing rate in the stock exchange. Chicago business.
This transaction contributes to the establishment of a market practice for the use of this rate in the region, and by industrial companies around the world.
The company explained that the guaranteed financing rate for one night provides a record interest rate, based on data derived from transactions that can be monitored, pointing to the adoption of the lending interest rate between London banks (Libor) in the disclosures of a group of other banks.
Zuhair Al-Rajaji, Chief Financial Officer of Emirates Global Aluminium, said that the company has opened new financial horizons in the Middle East by offering facilities based on a guaranteed overnight financing rate.
He added, “This is an example of how to manage the global transition to this new standard,” stressing that the facility, just like the previous facilities, will allow the company to continue its robust and structured approach to managing working capital in the short term and enhance its liquidity position.
According to the statement, the revolving credit facility provides Emirates Global Aluminium with access to $137.5 million, with the possibility of extending the repayment period up to 12 months.
The banks: "Abu Dhabi Commercial", "Emirates NBD", and "Dubai Commercial" participate in this facility.
The company pointed out that with this facility, the total renewable credit facilities for "Emirates Global Aluminium" amounted to $737.5 million.
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