Stanchart, Noor Islamic ready loan for shipping firm
Dubai, March 25, 2012
Leading banks Standard Chartered and Noor Islamic joined forces to arrange a $175 million loan for Stanford Marine Group, an offshore supply vessel owner and operator with a major presence in the Gulf, India and South East Asian region.
The structure of the five-year Senior Secured Club Facility was first of its kind in the region, said the duo, which acted as the initial mandate lead arrangers and structuring banks.
Besides Standard Chartered and Noor Islamic, the club of banks funding this transaction are Barwa Bank (Qatar), Mubadala GE Capital and Abu Dhabi Commercial Bank (ADCB).
Standard Chartered, which acted as the facility agent, investment agent, and hedging bank, said the proceeds of the term loan have partly been used to refinance existing debt.
The facility also provides growth capital to acquire second hand and/or build offshore supply vessels, it added.
Some lenders of the existing debt, such as Mubadala GE Capital and ADCB have reiterated their commitment and support to Stanford Marine’s growth plans.
The deal included dual currency tranches (of Dirhams and US dollars) as well as both conventional and Islamic Murabaha tranches.
The transaction included a conventional term loan and a Commodity Murabaha Shariah compliant facility sharing a security pool of 21 vessels through a security trustee arrangement and a set of common terms agreement.
SNR Denton acted as lenders’ counsel and HFW acted as borrower’s counsel.
Knut Mathiassen, the regional head of Shipping Finance, Middle East, Standard Chartered said: “The difficult market conditions that prevailed during the fourth quarter of 2011, imposed critical challenges on the lending market.'
With most European shipping finance banks retreating, on the back of the Eurozone crisis, this led to tightened US dollar liquidity pool and rising cost of funding, he remarked.
'Consequently, we had to explore other sources of bank funding, such as local currency and the Islamic liquidity,' remarked Mathiassen.
'Standard Chartered is committed to the UAE market and we are glad to successfully co-arrange this unique facility for Stanford and act as agent for both conventional and Islamic facility, and look forward to working closely with them,' he stated.
Kazim Ali, the acting head of corporate banking, Noor Islamic, said this was a complex deal, due to tight timelines and mortgaged vessels being flagged in different jurisdictions.
'It is a strong endorsement of our cross border Shari’a compliant financial expertise and our ability to leverage our world class footprint and capabilities in the Shari’a compliant finance sector,' he added.-TradeArabia News Service
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