Nomura, the global investment bank, today announces its Commodity Murabaha Facility has closed having raised US$70 million through syndication. Due to increased demand, the issuance was increased from the original target of US$50 million. ABC Islamic Bank, the Islamic finance subsidiary of Arab Banking Corporation, was appointed as the sole Mandated Lead Arranger.
Takuya Furuya, Chairman Middle East and Africa, Nomura said: “We are delighted that the success of this transaction exceeded our initial expectations; it reflects the strength of the Nomura brand and its reputation in the region. The issuance is part of Nomura’s strategy to diversify funding both geographically and by product and comes at a time when we have simultaneously launched a Sukuk in Malaysia.”
Continuing, Mr Furuya commented: “This Murabaha facility marks the first Islamic funding exercise by a Japanese corporate in the region and we hope that it will strengthen the financial ties between the Far East and the Middle East.”
The Facility has been structured as a Shariah compliant commodity Murabaha financing with a three-year tenor and offers a profit margin of 175bps per annum. As a symbolic debut transaction by Nomura into the Islamic finance market, the Facility will be used for general liquidity management purposes.
The participants in the Facility include ABC Islamic Bank, Islamic Development Bank (IDB), Samba Financial Group, Sumitomo Mitsui Banking Corporation Europe Limited and Ahli United Bank.
Mr. Naveed Khan, Managing Director of ABC Islamic Bank said: “This is a significant and landmark transaction for us, as this will be the first time that a Japanese firm has tapped the Islamic market using a Murabaha structure. We are delighted that Nomura has chosen ABC Islamic Bank to be the Sole Mandated Lead Arranger for this successful facility. We believe strongly that this will act as a trailblazer for other Japanese issuers looking towards the fast growing market of Islamic Banking for diversified funding sources in the future.”