Kuwait's Dar closes 1st part of $400mn Islamic loan

FUNDING ISSUES: Kuwait's Investment Dar is seeking a total of $400mn in Islamic finance. (Getty Images)

Kuwait's Investment Dar, which owns half of British luxury car Aston Martin, said it had closed the first tranche of a 1.5 billion riyal ($400 million) Islamic syndication to refinance debt.

The three-year Murabaha deal was priced at 200 basis points over SAIBOR (Saudi Arabia Interbank Offered Rate), Investment Dar said in a statement on Tuesday, adding that Saudi Arabia's Al-Rajhi Bank and Oman's Bank Muscat were funding the first tranche worth 600 million riyals.

In a murabaha deal a financier buys a commodity and sells it to the customer at a higher price, complying with Islam's ban on interest.

The funds will be used mainly to refinance Dar's more costly and shorter-term loans, Executive Vice-President Amr Abou Al-Seoud told newswire Reuters.

"It will be for general use of Investment Dar... mainly towards replacing debt which is more expensive," he said.

Dar is expected to close a second tranche of the financing deal before year end, despite the current global credit crunch, he added.

"We expect by November or December but we target to close it before the end of the year," he said.

Investment Dar has been expanding abroad by buying stakes in companies around the Middle East and Europe and wants to boost its banking operations abroad.

It said last month it could launch Islamic banking units in London and Dubai by the end of this year. (Reuters)

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM