Barwa Bank Initial Mandated Lead Arranger on Ezdan Holding Group Company Q.S.C.debut syndication

Doha, 1st April 2014–Barwa Bank, Qatar's fastest growing Shari’ah compliant banking service provider, was proud to hold the position of Initial Mandated Lead Arranger for Ezdan Holding Group Company Q.S.C. (Ezdan) first tranche of its USD500m debut syndication which closed on Monday 24th March2014.

 Late in 2013 Ezdan took on a new direction by looking to strategically diversify their business.  Ali Al-Obaidli, CEO of Ezdan commented,“Aside from being the first 100% Islamic finance transaction internationally syndicated for a Qatari corporate and led by a Qatari bank, the response to the syndication show a wide acceptance of the new business direction Ezdan announced late last year.  Being a premier name in Qatar and one that commits itself on 100% compliance to Shari’ah we were happy to have spearheaded this landmark Qatari Islamic finance transaction. ” 

 The transaction was the brain child of the Ezdan CFO MedhatAbdulmagid who noted,“It is important for Ezdan to strategically diversify sources of funding in order to support the companies vision for the future.  Our aim is to be able to tap international liquidity with the same efficiency and effectiveness we enjoy in the local market.  Ezdan maintains a premium credit profile which was evidenced by this successful syndication.” 

 Ezdan opted for an international placement of the transaction and Mashreq joined Barwa Bank as bookrunner on the transaction via their regional office.  Speaking on behalf of Mashreq Bank, Dubai, Mr Azeemur Rahim, Head of International Corporate Banking said, “We take pride in being partner of choice, and join Barwa Bank to deliver the first ever syndicated transaction for Ezdan. It was extremely important for us to deliver on the mandate given to us by Ezdan, to seek liquidity with banks outside Qatar, and it is testament of the Company’s strength that banks from around the region and as far away as Brunei and China have joined in this syndication.”

 The Mandated Lead Arrangers of the transaction were Ahli United Bank – Al Hilal Islamic Banking,AbuDhabi Islamic Bank, QFC Branch, BIBD (Bank Islam Brunei Darussalam), Mashreq AlIslami and Union National Bank.  Qatar First Bank was Co-Arranger, Industrial and Commercial Bank of China Doha (QFC) Branch and Sharjah Islamic Bankwere leadparticipants on the transaction.  The proceeds of the financing will be used to support the completion of key commercial and residential real estate developments in Qatar. 

 Barwa Bank has had an impressive impact on the syndicated finance and capital financing space given its relative age to other market players.  The recently appointedChief Business Officer, Khalid Al Ahbabi said, “Barwa Bank was happy to be able to bring this transaction to market and evidences the investment the bank is making into product and services to better meet client needs.  This is a watershed deal that highlights the sophistication of companies in Qatar being able to come to market in different financing formats and of the local banking market to be able to lead manage such transactions.  Importantly this is an indication and reinstatement of the role that Barwa Bank is committed to in leading Qatar’s 2030 vision in economic and social development.”

 Arsalaan Ahmed, Head of Capital Financing, Barwa Bank went onto say the he believes Qatar has a lot more to offer international investors, “Strong country fundamentals and strong banking regulation has created a credit environment that offers investors balanced risk-return profiles.  We believe there is more to come of such transactions out of Qatari issuers and we anticipate significant investor interest.” 

 But arranging transactions is not enough for Barwa Bank, a 100% Shari’ah compliant bank; doing it the right way is also important. The transaction was structured as an Ijarah financing. Ahmed noted, “Having a company with strict adherence to Shari’ah compliance allowed us to explore a structure and documentation that takes Ijarah to the next level in terms of harmonization of Shari’ah standards, something that is required if Ijarah financing is to play a more dominant role in Islamic finance structures in the banking market.” 

 The two tranches initially envisaged as being equal in size, however demand led to the first tranche closing at USD350m.  The second tranche of the transaction is expected to close in Q2 2014.