October 2, 2006
Shamil Bank Exits Early From Ehsa 2 Morabaha
The Bank Attributes Successful Exit to the Quality of Fund Structure
Shamil Bank, a leading Bahrain-based commercial and investment bank has announced the successful exit from Ehsa 2 Morabaha, one of its real estate Morabaha funds. The exit was not originally due until July 2007.
The deal was a 3 year Morabaha whereas the bank exited after two years of inception, thereby reducing the investment term by one whole year.
The Ehsa 2 Morabaha financed the purchase and sale of a land area of 1,787,610 m2 for a total consideration of SAR 360 million in the Al-Ehssa region, Kingdom of Saudi Arabia. The 3-years Morabaha was offered in three different classes to investors offering different rates of return for one, two and three-years investment terms reaching upto 8% per annum with enhanced security levels.
Commenting on the achievement, Mr. Ahmad Tayara, Head of Investment Banking, Shamil Bank said, “In light of the slow down in the real estate sector in Saudi Arabia, we have managed with the obligor to work out an earlier exit strategy through prepayment of the full outstanding amount”.
Mr. Abdulhakim Al-Mutawa, Head of Private Bannking added: “Our clients who invested in the provision of the Morabaha have exited successfully receiving their expected returns and the early exit has reduced the credit risk exposure from 3 to 2 years. At Shamil, we encourage our clients to invest with us when it comes to quality credit finance deals as this meets their expectation of higher yields with acceptable risk profiles”.
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