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Tabreed?s five-year global
corporate Sukuk (on behalf of the National Central Cooling Company, UAE)
provided a fixed coupon of 5.50%. It is a combination of Ijara Istisna and
Ijara Mawsufah fi al dhimmah (or forward leasing contracts). The issue was
launched to raise funds to retire some existing debt, which totals around
US$136 million, as well as to finance expansion.
The Durrat Sukuk will finance
the reclamation and infrastructure for the initial stage of a broader US$ 1
billion world class residential and leisure destination known as 'Durrat Al
Bahrain', currently the Kingdom of Bahrain's largest residential development
project. The return on the Sukuk is 125 basis points over 3 months LIBOR
payable quarterly, with the Sukuk having an overall tenor of 5 years and an
option for early redemption. The proceeds of the issue (cash) will be used
by the Issuer to finance the reclamation of the land and the development of
Base Infrastructure through multiple project finance (Istisna) agreements.
As the works carried out under each Istisna are completed by the Contractor
and delivered to the Issuer, the Issuer will give notice to the Project
Company under the Master Ijara Agreement and will lease such Base
Infrastructure on the basis of a lease to own transaction.
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