ABC Islamic Bank E.C. hosts signing of USD 80million Modaraba syndication

Vitol S.A. and ABCIB Islamic Asset Management (IAM) have signed an $80,000,000 Master Murabaha Agreement that forms the basis of this successful Modaraba for participating Middle Eastern banks. The Murabaha transactions envisaged under the arrangement involve IAM in the individual purchases of physical Refined Oil Products such as Jet Fuel from a refinery supplier at the tap of their storage tanks, and their sales to Vitol S.A. on deferred payment terms. The Facility is the first Islamic financing to be arranged for Vitol S.A., one of the world's largest physical oil traders and has an innovative structure that focuses upon the real underlying physical trade that is the basis for Shariah-compliant financing.

ABCIB's Trade & Commodity Finance and Financial Institutions unit originated this business from Vitol S.A. thanks to their long-term and excellent relationship with this client. The transaction was then structured by IAM, in close co-operation with Trade & Commodity Finance and Financial Institutions in order to facilitating the distribution process of this asset to Islamic investors.

IAM, working closely with ABC Islamic Bank in Bahrain in a team effort, has brought together commitments from a strong syndicate of Arab world institutions to participate in the Modaraba with the ABC Group and to develop further such business opportunities with this syndicate in the future. The co-operation between ABC group entities to make this a successful transaction underlines a strength in depth that is a benefit to clients and to the Co Mudaribs equally.

The initial group of banks acts in the capacity as Co Mudaribs for the first drawings, allowing other banks to join at a later stage when the facility can be increased to include further purchases of refined products.

Mandated Lead Arranger: ABCIB Islamic Asset Management Ltd, London

Participating Co Mudaribs: ABC Islamic Bank E.C. Bahrain: Arab Bank plc London: Qatar National Bank, London : International Islamic Arab Bank, Jordan : Persia International Bank, London: Bank Muscat, Bahrain : Habib Bank : Bahrain ABC International Bank plc : London.