Manama - Ahli United Bank (AUB) has announced the conclusion of a landmark $1.1 billion Murabaha financing facility.

The dual-tranche facility complies with the principles of sustainability, making it the first ever of its type raised by a financial institution worldwide.

The facility comprises a tranche that complies with Sharia principles set out by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), a Bahrain-based standard setting body, and another tranche that represents the traditional commodity Murabaha structure.

The pricing of the facility was linked to the three key performance indicators of green financing, social housing financing, and ESG governance integration.

The three-year facility was launched with an original target size of $750 million, later upsized by AUB to $1.1bn in order to satisfy the high demand and interest shown by its regional and international banking partners.

David O’Loan, deputy group chief executive of treasury and investments at AUB, commented, “We are extremely pleased to conclude this landmark facility, which is a testament to AUB’s credentials as a pioneering bank in Sharia-compliant transactions, and highlights the group’s strategic commitment to sustainable finance. We are also delighted with the strong support that AUB has received from its prestigious regional and international banking partners in this transaction.”

HSBC acted as the sole coordinator, investment agent, and initial mandated lead arranger, along with Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, First Abu Dhabi Bank, Gulf International Bank, Kuwait Finance House, Kuwait International Bank, MUFG Bank, Société Générale, The Saudi British Bank, and Warba Bank as mandated lead arrangers.

HSBC and First Abu Dhabi Bank also acted as the joint sustainability coordinators for the transaction.

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