Dubai-based construction firm Drake and Scull has issued a $120m five-year sukuk to help fund the company’s backlog of projects across the Gulf, Middle East and Asia.

The sukuk was issued as a private placement, meaning it was offered to a select group of investors. It is the first sukuk to be based on the murabaha trades of sharia-compliant certificates on Nasdaq Dubai’s new Murabaha platform.

The platform was set up earlier this year as a means of providing Islamic lenders a means of managing their short-term funding through murabaha. Such structures involve one financial institution acquiring goods and another bank buying it at an agreed increased price.

The unrated senior unsecured certificate is due on 12 November 2019, and will be redeemed fully at maturity.

Dubai-based banks Emirates NBD Capital, Mashrequbank, Al-Hilal Bank and Noor Bank were appointed as joint lead managers on the transaction.

Drake and Scull have a backlog of construction work standing at AED15.3bn ($4.2bn) as of 30 September.

During the past five years, the backlog grew at 28.8 per cent annual growth rate.

As well as expanding in Saudi Arabia, India and Egypt, the construction firm will also be targeting a small-cap acquisition to support its oil and gas division in the GCC, said Mukhtar Safi, chief financial officer at Drake and Scull.

The sukuk will also be used to refinance some short-term borrowings on the balance sheet.