Ahli United Bank BSC announced that it has completed an unprecedented $1.1 billion Murabaha financing transaction. These facilities were organized and classified as sustainable financing with a dual Islamic system, making it the first transaction of its kind in the financial sector around the world.
The facilities in this deal are divided into two tranches, one of which complies with the principles of Islamic Shariah stipulated by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), while the other tranche represents the traditional structure of commodity financing under the Murabaha system. The profit rates in these facilities were linked to three key performance indicators related to green finance, social housing finance, and governance integration in accordance with the Environmental, Social and Corporate Governance Practices System (ESG).
It is worth noting that this three-year agreement was launched with an initial value of 750 million US dollars, but the bank decided to raise this amount to 1.1 billion US dollars to meet the increasing demand from regional and international banks.
Commenting on this news, David Olon, Group Executive Vice President – Treasury and Investments at Ahli United Bank, said: “We are very pleased to have completed this unprecedented transaction, which reinforces the bank’s leading position in the field of Shariah-compliant operations, in addition to confirming the commitment The Ahli United Bank Group’s strategy for sustainable development goals in the banking field. We are also proud of the great support we received from our prominent partners of regional and international banks in order to complete this transaction.”
It should be noted that HSBC played the role of exclusive coordinator, investment agent and 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 and MUF Bank. AG, Societe Generale, the Saudi British Bank (SABB), and Warba Bank as authorized main organizers. HSBC and First Abu Dhabi Bank also acted as joint sustainability coordinators in the transaction.
