Bahrain’s Gulf Finance House (GFH) has signed a deal with German commercial bank WestLB, which acted as syndicate agent for a new $100m murabaha (Islamic finance) facility agreement.

In acting as syndicate agent, WestLB acted for a group of syndicate members. The agreement is valid for a two year period, but GFH can choose to extend this by one year.

Murabaha is a sharia-compliant cost-plus-profit financing transaction where an entity sells on a commodity to another person and adds some profit or mark-up, which is known to the buyer.

“We have now achieved our objective of spreading the tenor of nearly all of our obligations and we will continue to steadily strengthen our liquidity position as we concentrate on developing our new business model,” says Ted Pretty, GFH group chief executive.

GFH says it is looking to take additional steps to strengthen its capital base in the future.