Alia, The Royal Jordanian Airlines (RJ), the national flag carrier of the Hashemite Kingdom of Jordan announced the successful closure of its US$ 275,000,000 dual conventional and Islamic secured syndicated facility.
The syndicate comprised of seven banks based in Qatar, UAE and Jordan; they are Mashreq Bank (Mashreq), Arab Bank, Al Khalij Commercial Bank, Dubai Islamic Bank, and The Commercial Bank/Qatar acting as Mandated Lead Arrangers, Arab Jordan Investment Bank as Lead Arranger and Bank al-Etihad as Arranger. Mashreq acted as the sole book-runner for the transaction.
The facility carries a tenor of 5 years and the proceeds of the facility will be primarily utilized to consolidate and refinance RJ’s existing debt and further support the company’s on-going strategic growth and turnaround plans on the short- and medium-run.
Through its wide distribution network of regional partners, Mashreq endeavored to meet Royal Jordanian Airlines specific financing requirements and diversify its funding sources to GCC based conventional and Islamic banks. The transaction successfully encompassed a hybrid structure with a dual conventional and an Islamic (Wakala) tranche.
Having received an overwhelming response from the market, the facility exceeded the initial target amount, exemplifying the synergies developing between the Middle East and Levant region.
Chairman of Royal Jordanian Board of Directors Suleiman Hafez said: “Royal Jordanian Airlines has successfully secured a hybrid structured debt instrument as part of the airline’s on-going strategic capital raising program, to support its intensive turnaround and growth plans to evolve into one of the leading airlines in the Levant and Middle Eastern region. This syndication reiterates the airline’s access to avail international liquidity, with the same success it has accomplished with Jordan based financial institutions.”
Captain Suleiman Obeidat, President/ CEO of Royal Jordanian, said: “We would like to show our gratitude to Mashreq and other participating banks for the successful closure of this deal, which will support the airline’s well-studied plans to carry out network expansion and fleet modernization, particularly that RJ will introduce more 787s to its fleet by the end of this year. Today five 787s are operating in the fleet since 2014.”
Salman Gulzar, Head of Corporate Banking at Mashreq Qatar stated: “The successful closure of this transaction by Mashreq in these uncertain times demonstrates the trust and confidence we and our partner banks have in supporting reputable and strong Levant based Corporates in the regional and international debt market. Jordan has always been a strategic market for Mashreq and we remain committed to working alongside our core relationship clients like Royal Jordanian to execute innovative financial solutions aimed at supporting their business plans and creating efficiency in their operations. We would like to thank RJ again for entrusting us with this critical mandate and are glad that together we have successfully executed this significant transaction.”