Kuwait's Zain renewing $2.5bn Islamic loan - banker

ZAIN DEAL: Islamic loan includes 6-month extension option at mobile operator's request. (Getty Images)

Kuwaiti mobile operator Zain is renewing its $2.5 billion Islamic loan signed in 2007, a banker close to the deal said on Tuesday.

Syndication of the two-year murabaha facility has launched to the senior phase of selldown via bookrunners Banque Saudi Fransi, Calyon and Al Rajhi Bank and is being targeted at a small number of close relationship banks including Saudi and international banks, the banker added.

The deal, which includes a six-month extension option at the borrower's request, pays a margin of 425 basis points over LIBOR, the banker told Reuters Loan Pricing Corp.

Reuters LPC reported in April that Zain had begun talks with banks to refinance the original two-year murabaha facility signed in September 2007.

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.

Zain's most recent loan was a $1.2 billion Islamic financing signed in April 2008.

Zain is the second Gulf telecom to secure a loan this year after Qatar Telecommunications Co (Qtel), which will launch syndication this week of a $1.5 billion loan in order to increase the facility to $2 billion. (Reuters)

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