MANAMA, Bahrain - Citycorp's Citibank unit is arranging $84 million in short-term credit for Gulf Air to help finance the purchase of four Boeing 767 aircraft by the Middle East airline, banking sources said.
The two-year loan will allow Gulf Air to made a prepayment to Boeing Co. for aircraft to be delivered in 1993 and 1994, the sources said.
The loan will be repaid when Gulf Air arranges long-term financing for the full cost of the Boeing 767s nearer the time of delivery, the sources added. Gulf Air is expected to receive guarantees from the Export-Import Bank of the United States for the long-term credit.
About eight banks from Europe and the Gulf region have already agreed to join the Citibank deal, and the credit should be signed by the end of this month, sources said.
The loan is priced at 75 basis points above the London interbank offered rate (Libor), banking sources said. - Dow Jones