Bahrain-based First Islamic Investment Bank has entered a $149.9 million joint venture to acquire a Sharia compliant aircraft portfolio. Joining forces with leasing firm Montrose and Company International, the venture vehicle has acquired interests in 21 aircraft leased to leading flag carrier airlines or their subsidiaries.
The portfolio consists of a diversified mix of narrow body, regional jet and turbo-prop aircraft leased to British Airways, Air Canada and Brit Air. Part of the portfolio was leveraged using lease-based financing facilities totaling approximately $85.3 million, provided by Arab Banking Corporation (BSC), CIT Group and Natexis Banques Populaires.
First Islamic and its co-investors hold the majority ownership in the joint venture, with Montrose owning a minority stake. Montrose acted as overall transactions arranger whilst First Islamic acted as equity arranger. In addition Montrose, in its role as servicer, will be responsible for day-to-day management of the leases in the portfolio.
Montrose is a leasing specialist in the secondary market, serving institutional investors with portfolio management, lease advisory services and proprietary products, and currently manages leased assets totaling five billion dollars in original equipment cost, of which over three billion dollars consists of aircraft.
First Islamic projects that the investment will generate an attractive blended internal rate of return over a five-year investment horizon, inclusive of an annual cash yield that will be distributed on a quarterly basis.
First Islamic Investment Bank, a Bahrain-based investment bank, was established in 1997. Today, with a paid-in share capital of $112.5 million, and over 80 shareholders, First Islamic's mission is to provide Shari'ah compliant investment banking products to institutional and individual investors internationally. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
