3 banks to underwrite $26 million sukuk

ABU DHABI — Abu Dhabi Commercial Bank (ADCB), ABC International Bank (ABCIB) and Bahrain-based Arab Banking Corporation (ABC), and concluded an agreement to act as joint underwriters and placement agents for a corporate sukuk of $26 million, issued by Al Safina I Ltd, to finance a crude oil carrier.

By Haseeb Haider

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Published: Fri 29 Apr 2005, 11:48 AM

Last updated: Thu 2 Apr 2015, 4:10 PM

The financing has been arranged for MT Venus Glory, a Very Large Crude Carrier (VLCC), owned by the Pacific Star Group of Companies, a group controlled by Saudi Arabian interests. The senior debt has been underwritten by ABCIB and Credit Suisse and advised by Watson, Farley and Williams, London.

The Islamic component was co-underwritten by ABCIB's Islamic subsidiary, ABCIB Islamic Asset Management Limited, London, and Abu Dhabi Commercial Bank, Abu Dhabi.

The unquoted private issue utilised an Ijara (lease) Sukuk arrangement through a Jersey-based issue vehicle.

According to bankers, supporting the Sukuk was a lease financing of the vessel, under which it will remain under the ownership of the Pacific Star Group and continue to be chartered to Vela International Marine.

The investors were able to make a Sharia-compliant investment through the purchase of Sukuk, which gives them a beneficial right in the use of the vessel.

The structure did not interrupt the pre-existing leasing chain and allowed conventional bank finance to continue to be taken by the owners.

ABCIB's shipping team advised that the transaction involved the provision of conventional bank finance and an Islamic-compliant mezzanine component.

Seumas Gallacher, SVP and Head of the Corporate Banking Group at ADCB, signed the transaction alongside Arab Banking Corporation’s Chief Representative in the UAE, Mohamed El Calamawy.

Gallacher said: "The opportunity to participate alongside ABC in this well structured Islamic tranche of a regional oil-related transaction has a particular attraction for ADCB as the market economics for such an asset as ‘Venus Glory’ look positive.

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