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UAE banks participate in $90 million syndicated Murabaha facility for GFH

Two UAE banks — Mashreqbank and the National Bank of Dubai — participated in this facility for GFH, a leading regional Islamic investment bank that recently cross-listed its shares on Dubai Financial Market. In Dubai, GFH is the originator and major arranger of financing for the landmark $3.8 billion Legends project in Dubailand, one of the leading innovative tourism and mixed-use projects in the region.

In its debut approach to the international money market for facilities of this type, GFH had initially intended to raise $50 million, but keen interest by the participating banks resulted in the facility being extended to $90 million.

The facility provides GFH with short term funding to meet general contingency requirements, and is in line with recommendations from the Bahrain Monetary Agency for banks in the Kingdom to have committed funds available for liquidity contingency.

Commenting on the facility, Esam Janahi, Chief Executive and Board Member of GFH said: "The success of our first foray into the international money market for this type of facility, marks yet another major milestone for GFH. We are both delighted and encouraged by such an overwhelming response.

"This is testimony to the considerable trust and confidence that is placed in GFH by the international financial community. From a wider perspective, it also illustrates the growing global interest in the role of Islamic banking and finance."

The mandated lead arranger, book-runner and major underwriter for the facility is Bayerische Hypo — und Vereinsbank AG (HVB), a leading European bank with over 20 years' involvement in Islamic finance.

The participating banks comprise Bawag PSK Bank (Austria); Bumiputra — Commerce Bank Berhad, Malayan Banking Berhad (Malaysia); two institutions from the UK: Melli Bank, and Bank Sepah International; and three institutions from the GCC and Middle East: National Bank of Dubai, Burgan Bank and Mashreqbank.

Peter Panayiotou, GFH Deputy Chief Executive and COO, who represented the Bank at the signing ceremony, said: "International recognition and credibility are the hallmarks of a successful financial institution.

The exceptional oversubscription of this facility further endorses the status of GFH as a leading Islamic investment bank with a growing international reputation. We appreciate the support of all banks involved, and look forward to their continued participation in any future financing requirements of GFH."

Speaking on behalf of HVB, Leonhard Fehr, Managing Director, Head of Emerging Debt Capital Markets and Trade Finance, said: "The creation of a diverse product range of Islamic financial instruments is driven by an increasingly demanding customer base, and sets challenges for conventional and Islamic banks alike.

"We value the trust placed in HVB by GFH, and are delighted that this innovative transaction was so well received. The high oversubscription bears this out and underlines the significant interest in Islamic finance among the participating banks, none of which are Islamic."

Brian Lawrence, Head of Trade Products Sales UK, who represented HVB at the signing ceremony, said: "The GFH syndicated Murabaha facility is truly a first. It brings a unique structure to an outstanding borrower, supported by a diverse group of banks representing Europe, Asia and the Middle East.

"Given the stiff competition in our industry, it is hard to imagine a greater compliment being paid to a financial institution than to be entrusted with a foundational mandate from another financial institution."