RLPC-Dubai's loan refinancing challenge in spotlight

By Christopher Mangham

LONDON, Dec 18 (Reuters) - Loan syndicators active in the Middle East expect the next 12 months to be a challenge with $31 billion of loans to be refinanced in the region in 2009, bankers told Reuters Loan Pricing Corp (RLPC).

One-third of that figure belongs to the region's biggest borrowing group in 2008 -- Dubai's government owned entities known as "Dubai Inc," -- according to RLPC data.

"It will be very difficult for every deal to refinance," a loan regional specialist said.

In November, government-owned Dubai International Financial Centre (DIFC) secured state funds to pay back its $500 million loan that matured in December after Dubai said it was ready to step in to help state-affiliated companies. [ID:nL2298649]

Last week, Dubai World chose not to refinance after deciding it was not competitive and repaid an outstanding loan.

Most Dubai deals are expected to be rolled over on new terms, but some lenders will fall away from syndicates, bankers said. The United Arab Emirates' (UAE) government is providing some funds, sourced from Dubai's oil-rich neighbour Abu Dhabi to plug the gap.

"There is already assistance coming … mainly Abu Dhabi money," said a second banker who is a senior loan banker.