Trowers & Hamlins advises Bahrain Bay on USD150 million Islamic financing facility

Bahrain Bay Development is a joint venture mixed-use development between Arcapita Bank of Bahrain and a Bahrain-based investment group, off the North East coast of the Kingdom of Bahrain.

Phase One of the Bahrain Bay development will involve construction of all aspects of the infrastructure, including land reclamation, roads, electricity, water, communications, cooling and waste management.

Neale Downes, Partner in Trowers & Hamlins' Bahrain office, comments: "This transaction will provide funds to move the Bahrain Bay Development a very significant step further forward."

"Murabaha have become a hugely popular form of financing in the Gulf and have provided a real boost to the liquidity of the region. They are relatively easy to structure and share the flexibility of conventional loans, while satisfying key principles of Islamic law."

"This inherent flexibility allows the purchaser (the procurer of the funding) to meet working capital or liquidity requirements, to settle unanticipated costs and in particular, to pursue acquisitions or other opportunistic transactions, without the additional rigours of, for example, a project, acquisition or other structured finance."

Phase Two of Bahrain Bay will involve the construction of a Four Seasons hotel and the new global headquarters building for Arcapita Bank. The final stage will involve the development of residential, retail and commercial sub-projects around the two anchor developments.

Norton Rose advised Ahli United Bank.