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Friday, 14 September 2007

Bank of London and the Middle East acts as lead arranger for murabaha financing deal in turkey

The newly launched Bank of London and the Middle East (“BLME”), the London based wholesale, Sharia’a compliant bank, today announces that it has acted as lead arranger in a $100m Murabaha Financing Facility for Turkiye Finans Katilim Bankasi (TFKB) in a landmark deal for Islamic finance in Turkey. This announcement follows BLME’s launch last month as an FSA regulated bank, and marks the banks first participation in a syndicated Murabaha facility. BLME was the Lead Arranger and second largest participant, providing $10m of finance. TFKB is the 12th largest private bank in Turkey and the largest participation bank in the country in terms of total loans, deposits and branch network, with 124 branches. The bank has total assets in excess of £3bn and provides a wide range of Islamic banking products and services to retail and business customers. Murabaha is a common method of finance in Islamic banking and is a deferred sale of goods at cost plus an agreed profit mark up under which the seller purchases goods at cost price from a supplier and sells the goods to the buyer at cost price plus an agreed mark-up. This Murabaha financing facility has been raised for a total consideration of $100m, with a two year maturity and a profit rate fixed at an attractive level of Libor+70bps pa and will support TFKB in its efforts to restructure its capital.Humphrey Percy, CEO of BLME, comments: “The completion of such a large and relatively complex deal is testament to BLME’s considerable expertise and our role as Lead Arranger is indicative of the recognition we have received in the marketplace for the strength of our business proposition and the quality of our team. The completion of this transaction is particularly pertinent given the current climate of economic unease and market turbulence and sends a positive signal about the strength of opportunities available in Islamic finance.”
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