Kuwait's Alafco recieves last tranche of $600mln Murabaha facility

Kuwait - Alafco Aviation Lease and Finance Company on Wednesday announced the successful closure of a $600 million five-year unsecured Murabaha facility as it received the last tranche of $80 million.

The payment marked the last phase of the Murabaha facility, which was signed on 24 June 2019 with a value of $470 million at that time, according to a bourse statement.

The first tranche, which was received in June 2019, totalled $270 million, while the second tranche, obtained last December, amounted to $250 million.

Furthermore, the transaction will increase the company's assets through an $80 million (KWD 24.3 million) increase in cash and cash equivalents, and an equal increase in liabilities.

In this regard, Alafco’s CEO, Adel Ahmed Al Banwan, stated that the Murabaha deal will cover the operating and capital costs resulting from the company’s boosted operational performance and geographical expansion.

Alafco’s business model, which builds on strategic partnerships with major worldwide aircraft manufacturers topped by Airbus and Boeing, provides operating lease and leaseback services to a wide segment of local, regional, and international airlines.

Al Ahli Bank of Kuwait (ABK) and HSBC MENA acted as the transaction’s coordinators and subscription managers.

On the other hand, Warba Bank acted as the investment adviser, main organizer, and participated in subscription management. Moreover, the Commercial Bank of Kuwait (CBK), the National Bank of Bahrain (NBB), Kuwait International Bank (KIB), and First Abu Dhabi Bank (FAB) were main organizers for the transaction, with the latter also acting as an international adviser.

Additionally, Gulf Bank, Mashreq Bank, and Korea Development Bank (KDB) participated in the finance deal.

Translated by: Amal A. Wahaab