DUBAI: AlBaraka Turk, the Turkish subsidiary of Bahrain-based Islamic lender AlBaraka Bank, has signed a financing facility worth $430 million, a statement from the lead arranger on the loan showed.
AlBaraka Turk had mandated the Islamic arm of Arab Banking Corporation, Abu Dhabi-based Al Hilal Bank, Qatar's Barwa Bank, Dubai-based Emirates NBD, Noor Islamic Bank, and Standard Chartered Plc as lead arrangers and bookrunners for the syndicated facility, which was launched on July 18.
In August, the Bahraini lender was downgraded to junk status by Standard & Poor's, the only credit rating agency that rates the bank.
S&P cited increased sovereign and economic risk in the regions where the bank operates as a reason for the downgrade.
The sharia-compliant, dual-currency facility has been structured as a two-part deal and was oversubscribed from the original $250 million loan the bank wanted to raise, a statement said. Proceeds will be used for the bank's financing activities.
The profit margin for the one-year tranche is 100 basis points over the relevant benchmark and for the two-year portion it is 135 bps over benchmark.
Banks could contribute either U.S. dollars or euros.
Earlier this year, AlBaraka Turk raised $200 million from a 10-year Islamic bond, or sukuk, which is non-callable until five years, at 7.75 percent.
The sukuk was issued to boost Tier 2, or supplementary, capital. (Reuters)