Japan’s Nomura has launched a $50m Islamic loan to the syndication market and is asking banks to respond to the financing offer by the end of May.
The deal was launched in mid-May and the arrangers ABC Islamic, the Islamic banking branch of Bahrain’s Arab Banking Corporation, is asking banks to provide loans of either $15m, $10m, or $5m.
The deal is priced at 1.75 per cent a year and will have a tenor of three years. It is structured as a commodity murabaha, which involves the lenders buying a commodity and immediately selling it to the borrower. They then agree to be repaid at fixed price based on the cost of the commodity plus profit.
A source close to the deal says the loan should be closed by the end of June. He adds, “The deal is a symbolic transaction for Nomura as they want to start getting their name into Islamic finance and raising their profile with the Islamic finance houses.”
Islamic banks in the Gulf region are expected to form a major part of the banking group, according to the source.