RLPC-Dubai World launches $5 bln syndicated loan-source

LONDON, May 2 (Reuters) - State-owned investment group Dubai World has launched syndication of a $5 billion term loan, which will be used to refinance the borrower's $5 billion, 364-day bridge loan that signed last year, a banking source said on Friday.

The loan consists of a two-year tranche and a three-year tranche, worth $2 billion each, and a $1 billion five-year tranche. The two-year facility pays a margin of 135 basis points (bps) over LIBOR, the three-year facility pays 160 bps and the five-year tranche pays 185 bps, the source added.

Last minute pricing negotiations between the borrower and the lenders prior to the launch of syndication resulted in the margins being increased from 100 bps, 125 bps and 150 bps, respectively.

Bank of Tokyo-Mitsubishi UFJ, Calyon, Emirates Bank, HSBC, ING, Lloyds TSB, MashreqBank and Royal Bank of Scotland are arranging the deal.

The original loan backed the borrower's plan to buy into U.S. casino operator MGM Mirage. It paid a margin of 85 bps for the first six months, stepping up to 110 bps thereafter. (Reporting by Alasdair Reilly and Christopher Mangham; Editing by David Holmes)