GFH, Financial Centre Development Company announces successful closing of Al Marfa'a Al Mali Sukuk

The Istisna'a - Ijara Sukuk has been structured by the Liquidity Management Centre in accordance and in compliance with the principles of Islamic Shari'a. The Sukuk has a 5 year term maturing in 2010 offering a quarterly profit distribution and will finance the development and construction of the Financial Centre which represents the first phase of the Bahrain Financial Harbour project comprising the Dual Towers, the Financial Mall and the Harbour House.

The Sukuk offering which was recently launched has received an overwhelming response from various financial institutions in Bahrain and around the region, led by the Senior Lead Underwriters - Gulf Finance House Commercial Bank (Bahrain) and Liquidity Management Centre; Lead Underwriters - Islamic Development Bank, Dubai Islamic Bank, Emirates Islamic Bank and Bahrain Islamic Bank; along with other reputed participating financial institutions.

Liquidity Management Centre's Chairman, Mr. Aref Kooheji expressed his sincerest thanks to the BFHHC for having chosen LMC to arrange the transaction. He also added; "This high profile Sukuk continues LMC's momentum in the development of depth in the primary issuance market. Such primary market depth is critical to the continued development of secondary Sukuk market activity. As an organization we remain very much committed to the attainment of our mandate."

Mr. Ahmed Abbas, Chief Executive Officer of the Liquidity Management Centre commented; "The successful closure of the Al Marfa'a Al Mali Sukuk issue represents another milestone for the Islamic financial community in the Kingdom of Bahrain and reaffirms Bahrain's position as the pre-eminent financial centre and an Islamic finance hub". Mr. Abbas further expressed his gratitude and thanks to Bahrain Financial Harbour, the underwriters and participating institutions for their support in bringing this issue to a successful closure, which reflects the confidence of underwriters and investors in this visionary project.

Bahrain has carved a niche for itself as a global hub for the issue, listing and trading of sukuks. The evolution and growth of the sukuk market is mainly due to the initiatives of the Bahrain Monetary Authority. Sukuks, often referred to as Islamic bonds, are innovative Shari'a-compliant instruments that are emerging as a significant asset class. The consistent successful closings of corporate and sovereign sukuks reflect the huge appetite for the instrument and is encouraging an active secondary market.

The acquisition of sukuks significantly brings down risk and diversifies the investor's portfolio. The launch of sukuks such as Al Marfa'a Al Mali assumes importance given the size and significance of the Islamic finance market. Besides meeting the dearth in Islamic product offerings, its goes a long way in boosting trans-national fund flows and deepening the capital markets of the Islamic world.

The Financial Centre is at the core of the Bahrain Financial Harbour and is the first phase of the development. It is anticipated that the Financial Centre will house investment and commercial banks, offshore banking units, legal and advisory services, takaful companies, fund managers, IT firms, professional institutes, leasing companies and financial consultants. Construction for the Financial Centre commenced in March 2004 with an expected completion date of late 2006.