Kuwait International Bank has signed a three-year murabaha financing facility worth $320 million; the Kuwaiti bank plans to use the sharia-compliant murabaha facility for general business purposes, and the facility acts as a cost-plus-profit arrangement.
Kuwait International initially listed the facility for $100 million, but the offering was increased after the marketing period that began in June showed great interest in the investment facility. The oversubscribed facility was increased to $320 million to meet that demand.
The Bahrain-based Bank ABC and its Islamic finance arm arranged and coordinated the murabaha, with a total of 13 regional and international banks participating in all.
Mohammed Jarrah Al-Sabah, KIB’s chairman, said regional and international participation in the syndicated facility speaks to Kuwait International Bank’s standing in the finance industry.
“This not only confirms the trust and reputation of KIB in the international financial arena backed by the resilient and robust economy of Kuwait, but also the increasing global acceptance of sharia-compliant products and structures,” Al-Sabah said.
Ray Ferguson, executive vice president and chief banking officer for Bank ABC, said the financial institution was glad to be chosen to facilitate and arrange KIB’s first syndicated murabaha instrument.
“It is a landmark transaction where we have been able to demonstrate our commitment and meet the requirements of one of our important clients,” Ferguson said.
