UAE’s Emirates Central Cooling Systems (Empower) received board approval to obtain a three-year unsecured loan to refinance outstanding debt of AED 2.75 bn, according to a statement (pdf).

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What could be behind the decision? The move will allow Empower to take advantage of favorable market conditions as interest rates eased in the UAE, the Arabian Post writes. The refinancing aims to reduce interest rates, extend repayment terms, and improve liquidity.

ICYMI- The Central Bank of the UAE followed in the US Federal Reserve’s footsteps last week and cut the overnight deposit rate by 50 basis points, from 5.40% to 4.90%, while leaving the interest rate applicable to borrowing short-term liquidity at 50 basis points above the base rate.

Other UAE players have done the same: AD Ports Group inked agreements with two UAE banks to refinance its USD 2.25 bn syndicated loan last week. The new terms are expected to shave off up to USD 12 mn (AED 44 mn) in finance costs over the next year.

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