Dubai: Standard Chartered Bank and Noor Islamic Bank announced yesterday that they have acted jointly as initial mandate lead arrangers and structuring banks for a five-year $175 million (Dh642.77 million) senior secured club facility for Stanford Marine Group.
The club of banks funding this transaction was Standard Chartered, Noor Islamic Bank, Barwa Bank of Qatar, Mubadala GE Capital and Abu Dhabi Commercial Bank (ADCB). Standard Chartered Bank acted as facility agent, investment agent, and hedging bank.
The proceeds of the term loan have been used partly to refinance existing debt. The facility also provides growth capital to acquire secondhand and/or build offshore supply vessels. Some lenders of existing debt, such as Mubadala GE Capital and ADCB, have expressed their support for the group's growth plans.
"The difficult market conditions that prevailed during the fourth quarter of 2011 imposed critical challenges on the lending market. With most European shipping finance banks retreating on the back of the Eurozone crisis, this led to a tightened dollar liquidity pool and rising dollar cost of funding. Consequently, we had to explore other sources of bank funding, such as the local currency (dirham) and Islamic liquidity," Knut Mathiassen, regional head of shipping finance, Middle East, Standard Chartered, said.
The deal included dual currency tranches (dirham and dollar) as well as conventional and Islamic Murabaha tranches. The transaction included a conventional term loan and a commodity Murabaha Sharia-compliant facility sharing a security pool of 21 vessels in a security trustee arrangement and a set of common terms agreement.
"This was a complex deal due to the tight timelines and the mortgaged vessels being flagged in different jurisdictions. It is a strong endorsement of our cross-border Sharia-compliant financial expertise and our ability to leverage our footprint and capabilities in the Sharia-compliant finance sector," Kazim Ali, acting head of corporate banking, Noor Islamic Bank, said.