By Jonathan Saul
Fund aims to target top 20 percent of ship operators and comply with Islamic law.
Qatari investment bank QInvest is confident of Middle East investor appetite for its joint $200 million shipping fund with Fortis Bank Nederland despite the Dubai debt crisis, QInvest officials said on Monday.
QInvest and Fortis Bank Nederland have each committed $50 million to the five-year mezzanine fund, which will comply with Islamic law and aims to provide financing to investors and ship owners hit hard by the global downturn.
"This fund's characteristics are somewhat unrelated to the Dubai crisis as this is a fund that is focused on where we are in the global shipping cycle," Rommie Bhutani, QInvest's co-head of principal investments, told Reuters in an interview.
"We believe this is an attractive asset class and a number of our clients have told us this is something they want to be involved with."
Singapore shipping trust First Ship Lease Trust said on Monday it had suspended its plans to issue up to $200 million of senior notes due to the impact that the Dubai crisis was having on investor sentiment especially in Asia and Europe.
Dubai's stock index slumped to a 20-week low on Monday after the emirate's government said it would not sell assets to meet the multi-billion dollar obligations of state-owned Dubai World.
QInvest said the majority of the capital it was seeking would be raised in the Middle East, adding that marketing of the $100 million or possibly more would start in early 2010.
Faiz Nassim, head of structuring with QInvest said: "We are essentially a large regional player with substantial inroads to the Qatari investor base." He added that the focus would be on the Qatari market as well as other Gulf Cooperation Council countries.
QInvest, whose shareholders include Qatar Islamic Bank, said large assets such as ships worked well with Sharia financing.
"The shipping market has taken a beating more than necessary and as a result it has created an opportunity which we wanted to capitalise on," Nassim said.
QInvest said teaming up with Fortis, a global shipping bank, would help the fund target the top 20 percent of ship operators.
"We believe we can finance assets at conservative LTVs (loan-to-values) and at attractive yields," Bhutani said.
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