Hogan
Lovells, Skadden, Latham advise on US$3.5bn Islamic finance deal
By Pamela Hamer-Koh
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Friday, 20 August 2010
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Qatari Diar Finance- Barwa City Real Estate murabaha finance deal
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US$3.5bn
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Synopsis:Qatari Diar Finance will fund a number of large scale projects by Barwa through two structured murabaha contracts
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Firm
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Client
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Role
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Hogan Lovells [lead partner: Rahail Ali] |
Barwa City Real Estate
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Lead counsel
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Qatari Diar Finance
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Lead counsel
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Skadden [lead partner: Harold Moore]
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Underwriters
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Lead counsel
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Hogan Lovell, Latham & Watkins and Skadden acted on a US$3.5bn murabaha financing deal by Qatari Diar Finance to Barwa City Real Estate – the largest murabaha financing deal of its kind to date.
Qatari Diar plans to target international finance through a bond issue, funnelling the proceeds through two murabaha structure contracts to fund a number of large-scale projects developed by Barwa in Qatar.
The first murabaha contract will provide US$1bn due in July 2015, with the remaining US$2.5bn due in July 2020.ALB
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Murabaha definition:
An Islamic financing structure, where an intermediary buys a property with free and clear title to it. The intermediary and prospective buyer then agree upon a sale price (including an agreed upon profit for the intermediary) that can be made through a series of installments, or as a lump sum payment.
Murabaha is an acceptable form of credit sale under Sharia (Islamic religious law). Similar in structure to a rent to own arrangement, the intermediary retains ownership of the property until the loan is paid in full.
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*Source: Investopedia
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