Reef and Calyon strike groundbreaking real estate financing deal

Through an Islamic warehousing facility to be refinanced by an international mortgage-back securitisation, the first of its type in the Kingdom, $150m will be raised to help provide competitive financing for Bahrain property purchases.

The signing ceremony between Reef and Calyon was held at Reef's headquarters and was attended from Reef's side by Mr. Ali Al Baghli, Chairman of Reef's Board; Mr. Faisal Al Matrook, board member and Executive Committee Chairman; Dr. Khalid Abdulla, Reef board member and acting Chief Executive Officer and Mr. A.Nasser A.Rahman, Chief Business Officer.

From Calyon, the ceremony was attended by Mr. Fabio Stupazzini, Calyon's Managing Director and Head of Emerging Markets Middle East and Africa Securitization, Mr. Tim Lupprian, Calyon's Head of Middle East and Africa Origination Emerging Markets Securitisation, and Ms. Nathalie Ensnault, Calyon's Managing Director of Securitization, Finance and Alternative Risk Transfer.

Reef's Board Chairman, Mr. Ali Al Baghli commented on the occasion: "Reef is very enthusiastic about our partnership with an institution as renowned as Calyon; the collaboration marks a significant milestone for us at Reef and more importantly for the Bahraini mortgage finance market. Reef is proud to bring such innovative financing transactions to the local playing field. Securitisation is one of the best ways for Reef to obtain additional funding towards furthering its business ventures, specifically in terms of financing for residential properties."

Dr. Khalid, Reef's CEO, continued, "Under the terms of the transaction, Calyon will extend $150m to Reef, through a warehousing and securitisation process targeted at investors in Western Europe. The funding will position Reef at the forefront of the mortgage finance market in the Kingdom of Bahrain and the wider GCC market, by giving the company the means to give house-buyers better financing options. Such competitive financing will be a key contribution to relieving the strain of mortgage financing on Bahraini and GCC resident realty buyers. Calyon's confidence in Reef's value creating role within the Bahraini economy and in the bright future of the Bahraini economy itself is of utmost importance to us at both a corporate and national level".

The Reef facility is a strategic value addition to its business from a shareholder's perspective, and more importantly it will be leveraged in business plans which will result in better options for the company's clients in terms of mortgage financing.

Mr. Al Matrook further noted, "Our brand promise at Reef has always been driven by the notion of providing choices, and we are proud to be applying the most sophisticated international financing techniques in our role as a mortgage finance solution provider. Calyon's tangible support of our business model is a boost to our belief and ability to provide people with choice, innovation, and flexibility in their real estate financing options."

Calyon's Mr. Fabio Stupazzini said, "Calyon is delighted to be working with Reef. From inception, Reef has established itself as an innovator. Reef's business model enables it to make use of opportunities available for financing in the international capital markets. Calyon's commitment to Islamic finance, and our extensive residential mortgage -backed securitisation experience makes us a natural partner for a mortgage originator of Reef's ambition and capacity. Even in the current difficult international money market conditions, the logic of our collaboration with Reef is strong."

Calyon, is Crédit Agricole corporate and investment banking arm. Crédit Agricole Group is the world's 6th largest bank by total assets (The Banker magazine, July 2007). The partnership between Reef and Calyon is a positive indication of the increasing maturity of the Bahraini financial market, and the prospect of international collaborations such as the one achieved by Reef.

Coming on the heels of a previously announced bond scheme for government housing, which was designed to assist in providing mortgages, Reef's additional funds will ensure the company remains a key player and contributor to the health and growth of the home finance sector in the Kingdom of Bahrain.