RIYADH, 15 April 2006 — Al-Rajhi Bank has signed a maiden $500 million three-year murabaha financing facility at a ceremony attended by representatives of 19 banks and financial institutions in Bahrain on Wednesday.
Initially, Al-Rajhi went to the market with a $300-million loan that had been oversubscribed by $535 million when lead arrangers closed the facility at $500 million. Arab Bank PLC, Calyon, Gulf International Bank B.S.C., Malayan Banking Berhad, Standard Chartered Bank and WestLB AG, London branch were the mandated Lead Arrangers for this project.
“We are extremely pleased with the outstanding performance of our debut fundraising. The geographic diversity and high quality of syndicate participants reinforce the confidence of regional and international financial markets in Al-Rajhi’s clear vision and strategy for success,” Abdullah Suleiman Al-Rajhi, chief executive officer of Al-Rajhi Bank, told Arab News in a statement issued here yesterday. “The facility will contribute greatly to our ambitious plans for future growth and to the diversification of our financing base,” he added. “The group was encouraged by the response from regional and international institutions to its first ever financing loan,” he said, pointing out that Al-Rajhi would look forward to such more endeavors in line with the bank’s vision and strategy. “We are working on various expansion projects but there is no immediate plan to open a bank branch or operations in Bahrain,” he stressed.
The signing ceremony took place at the Ritz-Carlton, Bahrain, and was attended by top executives of the participating banks and financial institutions from MENA (Middle East-North Africa), Asia, Europe and the Americas. Norton Rose acted as legal advisors to the facility.
Arul Kandasamy, head of the Islamic bank within Calyon Bank, told Arab News that “this is a landmark transaction in the history of Islamic finance and Calyon was proud to have worked with Al-Rajhi on its first ever international fund raising.” He added that funds would be used for general funding purposes of Al-Rajhi, and to enable Al-Rajhi to better match its assets and liabilities.
Al-Rajhi is the largest listed bank in the Kingdom and the third largest listed institution in the GCC with a market capitalization of over $91 billion. The bank reported exceptionally strong results for last year with profits after tax increasing 92 percent to $1.5 billion. It is one of the largest Islamic financial institutions with total assets of $25.3 billion and shareholder equity of $3.6 billion at the end of last year. The bank is a fully Shariah-compliant bank based in the Kingdom of Saudi Arabia providing wholesale, retail and commercial banking products and services in addition to investment banking. It has the largest branch network (more than 400 branches) distributed throughout the Kingdom, the largest ATM network (1,300 machines), over 9,000 POS installed with merchants throughout the Kingdom and the largest customer base with more than two million clients.
Gulf International Bank is the facility agent, Standard Chartered Bank acted as documentation bank while Calyon, the corporate and investment bank of the Credit Agricole Group, acted as financial advisor to Al-Rajhi Bank.
