Saudi Arabia's Jabal Omar Development Company has signed a SR5 billion ($1.33 billion) loan agreement with a group of local banks to refinance an upcoming bridge loan maturity and fund the development of hotels and shops in Makkah.

The loan runs for 12 years, with a four-year grace period on repayments, the developer said in a filing to the Saudi stock exchange on Monday.

The cash will refinance a SR1.35 billion bridge loan, the statement added, and be used to fund the company's commercial development project in Makkah.

A source with knowledge of the matter said the bridge loan was due to expire on July 2. The new loan will be provided by a group of seven banks, the source said, speaking on condition of anonymity.

Al Rajhi, Bank Al Jazira, National Commercial Bank, SABB and Saudi Hollandi - which provided the original bridge loan - have signed up to the deal, the source said. Alinma Bank and Bank Al Bilad have also agreed to fund the deal, the source added.

Jabal Omar shares rose 1.5 per cent at 0835 GMT on the Saudi bourse.-Reuters