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Overview

ICBC contributes $30 million to $460 million syndicated loan to Ezdan Holding Group for debt refinancing and liquidity purposes

Commitments (Constant USD, 2023)$32,721,647
Commitment Year•2016Country of Activity•QatarDirect Recipient Country of Incorporation•QatarOverseas Jurisdiction•QatarSector•Business And Other ServicesFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Dec 7, 2016
First repayment (originally scheduled)
Sep 6, 2018
Last repayment (originally scheduled)
Dec 5, 2024

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

Cofinancing agencies

Intergovernmental Organizations

  • Bank of Bahrain and Kuwait B.S.C (BBK)

Private Sector

  • Ahli United Bank
  • Dubai Islamic Bank PJSC (DIB)
  • HSBC (Hong Kong and Shanghai Banking Corporation)
  • Mashreq Bank

State-owned Banks

  • Emirates NBD Bank P.J.S.C.
  • National Bank of Ras Al-Khaimah P.J.S.C. (RAKBANK)
  • Union National Bank (UNB)

Receiving agencies

Private Sector

  • Ezdan Holding Group Q.P.S.C. (formerly Ezdan Real Estate Company)

Loan description

2016 syndicated $460 million USD loan facility from ICBC and others to Ezdan Holding Group for debt refinancing in Qatar

Grace period•1.75 yearsInterest rate (t₀)•4.69322%Interest type•Variable Interest RateMaturity•8 years

Narrative

Full Description

Project narrative

On December 7, 2016, a syndicate of banks including the Doha Branch of the Industrial and Commercial Bank of China (ICBC) entered into a $460 million senior secured syndicated loan (referred to as a Murabaha facility due to Qatari sharia law) agreement with Ezdan Holding Group (Ezdan) for refinancing purposes. The proceeds were to be used to refinance previous commitments, increase its liquidity, and strengthen its ties with other regional lenders. The loan had a maturity date of 8 years and an interest rate of 340 bps (3.4%) plus contemporary LIBOR. Ezdan originally sought just $300 million in funding, but due to a greenshoe option within the facility allowing for upsizing with lender interest, the loan was 1.53 times oversubscribed. Previously, Ezran had accrued $1 billion in financing through two syndicated loans in 2015 and 2016. There were ten total contributors to the syndicated loan. Mashreq Bank acted as global coordinator, mandated lead arranger, and bookrunner, and contributed $75 million. Dubai Islamic Bank (DIB) and HSBC acted as mandated lead arrangers and bookrunners and contributed $75 million each. Emirates NBD and United National Bank (UNB) acted as mandated lead arrangers and contributed $50 million each. Ahli United Bank and the National Bank of Ras Al-Khaimah (RAKBANK) acted as lead arrangers and contributed 35 million each. Industrial and Commercial Bank of China (ICBC), the Bank of Bahrain and Kuwait, and United Bank Limited (UBL) acted as lead arrangers and contributed $30 million, $20 million, and $15 million respectively.

Staff comments

1. The loan is described as a secure facility in the sources. However, the collateral used by the borrower is currently unknown. The issue warrants further investigation. 2. As this loan was signed in Qatar, it is structured as a Murabaha (or cost-plus) financing facility in order to comply with sharia law, which forbids the signing of interest-bearing loans. In practical terms, this means some or all of the members of the lending syndicate purchased some asset from the borrower with the intention of reselling said assets at a fixed profit equivalent to a marginal interest rate.