Innovative capital raising completed by Al Wa'ab City

The company has raised QR4.75bn ($1.3bn) of capital from debt, Mezzanine and equity funding sources for the QR11.5bn ($3.2bn) Al Wa'ab City project.

This financing stands out due to the raising of such a large amount of capital, in such challenging times for the financial markets. The innovation stems from a unique Mezzanine financing element that is the first such transaction in the Middle East.

The company has raised QR3.6bn ($1bn) in senior debt on a fully underwritten basis which represents almost a third of the total value of the project. The remaining two thirds are coming from a mixture of equity and Mezzanine finance.

The debt has been arranged by a combination of international banks (HSBC); regional banks (Abu Dhabi Commercial Bank, Ahli United Bank and Mashreq Bank); and local Qatari banks (Qatar National Bank, Al Khaliji Bank and Doha Bank) whilst the Mezzanine is being raised through an investment vehicle in which Amwal, Shuaa Capital, Kaupthing and Q-Invest are the sponsors and an initial closing of QR730m ($200m) has been achieved with other investors also participating. In addition QR4.4bn ($1.2bn) of equity has also been injected from the promoters Nasser Bin Khaled Holding and other investors.

"We are delighted with such a strong show of confidence in Al Wa'ab City, since everything about this project is unique," said Sheikh Nawaf Nasser Bin Khaled Al Thani, Chairman of Al Wa'ab City. "First, the project itself is Qatar's first master development, and will be a Doha landmark. Second, It is highly significant that the developer is a private business, unconnected to the State of Qatar" Sheikh Nawaf commented.

Sheikha Hanadi Nasser Bin Khaled Al Thani, CEO of Al Wa'ab City added "The financing of this project is ground-breaking for the Middle East. It is the first time that senior debt and Mezzanine finance, let alone one that is Shari'ah compliant, have been combined for a regional borrower alongside equity investors, and the first time that this very strong combination of local, regional and international banks, sponsors and investors have come together in this way."

Al Wa'ab City is Qatar's first family planned community and one of the largest privately held real estate projects in the country. Al Wa'ab City is a multi-use development conveniently located along one of Doha's main arterial road and in close proximity to some of Doha's major academic institutions and sporting facilities. Al Wa'ab City is expected to be substantially completed in 2010.

Al Wa'ab City integrates a wide variety of housing styles and options, small- and large-scale retail, low-rise offices, health facilities, and a world-class 200-room luxury hotel surrounding the 44,000 sqm stunning urban piazza that is "Barahat Al Wa'ab". Al Wa'ab City will be home to more than 8,000 people in approximately 2,000 residential units. The development occupies an area of approximately 1.25 million square meters with over 10,700 parking lots. This gives Al Wa'ab City one of the lowest population density ratios of any new major development in the country.

The financial advisors to the project are Amwal, HSBC and Kaupthing. The project feasibility consultants and auditors are Deloitte and the cost consultants are Gleeds. The project prides itself on its consultants and advisors where the main contractor is Arabtec, the project managers Cansult AECOM Maunsell, the project facility managment is done by SNC Lavalin Profac Gulf Management, the real estate advisor and "valuers" are DTZ. Legal advisors to the company are Norton Rose and legal advisors to the senior debt lenders are Clifford Chance and to Mezzanine lenders King & Spalding.