LONDON: Qatar's Barwa Real Estate Co has signed a US$700 million (US$1 = RM3.35), one-year revolving Islamic loan, which was reduced from US$800 million after the deal was undersubscribed in syndication, banking sources said.
A banker said lenders' appetite for the deal was hit because of the increased cost of funding prompted by the credit crunch.
Support for the deal was also hit partly because as a non-sovereign, regional property company, the borrower has a limited number of relationship banks to call upon, the banker added.
Initial mandated lead arrangers are BNP Paribas, Gulf International Bank, JPMorgan, Standard Chartered Bank, The First Investor and Unicorn Investment Bank.
Proceeds will be used to finance the expansion of Barwa and its ongoing projects. The murabahah facility, which includes a one-year extension option, pays a profit rate of 90 basis points (bps). The extension fee is 10 bps. Lenders were invited to join at one of three levels.
Mandated lead arrangers were offered a participation fee of 30 bps for a commitment of US$75 million, co-arrangers 22.5 bps for US$50 million and lead managers 15 bps for US$25 million.
In August, Barwa signed a US$600 million, one-year murabahah financing via lead bank Gulf International Bank. That deal, which was increased from US$500 million after raising US$725 million in the market, included a two-year extension option.
Islam bans lending on interest, and in a murabahah deal a lender purchases a commodity and sells it to customer at a higher price, locking in profit.
Government-owned Qatari Diar Real Estate & Investment Co owns 45 per cent of Barwa.By Reuters
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