Tamweel turns to Islamic financing to help its expansion programme (MUSTAFA KASMI)
Tamweel, the largest UAE mortgage firm by market value, has started syndication of a $250 million Islamic loan facility to finance expansion, three bankers familiar with the deal said on Monday.
The three-year loan, like Tamweel's mortgage business, complies with Islam's ban on lending on interest. The facility will be structured as modaraba or profit-sharing agreement, the bankers said, asking not to be named.
Syndication is scheduled to close on December 19 with the margin on the loan set at 65 basis points over London Interbank Offered Rate, two bankers said.
ABN Amro and Dubai government-owned Noor Islamic Bank are arranging the facility.
Tamweel said on December 8 it had agreed a Dh1.7 billion ($463 million) loan facility with Emirates Islamic Bank. It sold $210 million of mortgage-backed bonds this year to free up cash for expansion.
Tamweel officials declined to comment.
In July, Tamweel launched a real estate finance business in Saudi Arabia in partnership with a local developer. (REUTERS)