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Thu 6 Sep 2007 04:30 PM

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MTC signs $7.4bn Islamic loans

Kuwaiti telco signs two Islamic loans to help pay for licence it won to operate Saudi Arabian mobile network.

Kuwait's Mobile Telecommunications Company (MTC) has signed two Islamic syndicated loans worth a total of $7.39 billion via bookrunners BNP Paribas, Calyon, Citigroup and Samba, banking sources said on Thursday.

MTC has signed a 2-year 18.328 billion riyal ($4.89 billion) murabaha guarantee facility to help pay for the licence it won to operate Saudi Arabia's third mobile network, and a 2-year $2.5 billion murabaha facility that will be used to refinance the borrower's $1.2 billion murabaha facility signed in December 2006 and for general corporate purposes.

Murabaha is where a lender buys a commodity and sells it to a customer at a higher price, locking in profit and complying with Islam's ban on lending with interest.

MTC, which will start operating under the 'Zein' brand on Sunday, agreed to pay around $6.11 billion to set up the third Saudi mobile network.

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