Albaraka Turk secures US$450 million dual-currency Murabahah syndicated facility (By IFN)

Tuesday 18^th September 2012

TURKEY: Albaraka Turk, the Turkish subsidiary of Al Baraka Banking Group, secured a US$450 million dual-currency Murabahah syndicated facility with 32 banks as it embarks on a fundraising spree that could see it raise another US$250 million via a Sukuk sale by the end of this year. The syndicated facility, arranged by banks from 16 countries, comprises a US$293.2 million tranche and a EUR124.5 million (US$163.69 million) tranche with one-year maturities. Albaraka Turk will pay a profit margin of three-month Libor/Euribor plus 200 basis points for the facility. Bank Islam Brunei Darussalam and Al Hilal Bank were mandated lead arrangers for the transaction, which also saw the participation of ABC Islamic Bank, Emirates NBD, Noor Islamic Bank and Standard Chartered Bank. The funds will be used by Albaraka Turk to diversify its funding sources and expand in its local market. Adnan Ahmed Yousif, the chairman of Albaraka Turk’s board as well as the president and chief executive of Al Baraka Banking Group, was earlier quoted as saying that the Turkish bank was looking to raise up to US$750 million this year, with US$400-500 million of that comprising the syndicated facility; and US$250 million via a seven-year Sukuk. The bank has been talking up a potential Sukuk offering since 2011, with its would-be debut sale initially targeted for the end of that year. However, the sale was put on hold due to expensive pricing for the deal; reportedly at around 6.5%. The planned size of its issuance has also varied from US$200-500 million.