Dubai, United Arab Emirates, December 16, 2020: ENBD REIT (CEIC) PLC (“ENBD REIT”), the Shariah-compliant real estate investment trust managed by Emirates NBD Asset Management Limited, announced the successful refinancing of all of its existing debt through a syndicated Murabaha equivalent to US $ 200 million Shariah Compliant Facility with Emirates NBD and Commercial Bank of Dubai. The facility was successfully syndicated by Emirates NBD Capital, the investment banking arm of Emirates NBD, acting as bookrunner.
The credit facilities used by ENBD REIT include $ 45 million with Standard Chartered Bank and $ 150 million with Mashreq Bank. Consolidating the debt of the Company into a single syndicated facility will improve the overall capital structure of the REIT and reduce the cost of funding in the future.
The 5 year facility is for profit only and includes a currency swap to improve overall pricing. The improved profit margin is expected to result in savings of over $ 7 million in financing costs for ENBD REIT over the life of the facility. Favorable financial covenants will also support ENBD REIT’s earnings coverage ratios and loan-to-value ratio (“LTV”) which will be below 60% under this new facility. Since the financing was provided by a related party, management has taken the necessary steps to ensure that it meets all regulatory requirements.
Anthony Taylor, Head of Real Estate at Emirates NBD Asset Management, noted:
“Timely refinancing all of our debt in a new facility on attractive terms is a major step in strengthening our financial position as we begin to emerge from the pandemic. We are pleased to have secured this long term commitment from Emirates NBD and Commercial Bank. of Dubai which enables significant cost reductions and positions us well to seek other opportunities to realize shareholder value in the future.
We would like to take this opportunity to thank Standard Chartered and Mashreq Bank for all their support over the past 3 years, in exceptionally difficult market conditions. “
Ahmed Al Qassim, Group Head, Corporate and Institutional Banking at Emirates NBD, said: “We are delighted to have played a leading role in enabling ENBD REIT to obtain attractive terms on its debt. ENBD REIT has proactively taken advantage of current market conditions to optimize its profile. Our partnership on this transaction will provide them with a tailor-made facility that will enable them to achieve their goals and implement their strategy. With the continued recovery in the real estate industry, the REIT is well positioned to deliver long term value to shareholders.
As of September 30, the net asset value (“NAV”) of ENBD REIT was USD 164 million (USD 0.66 per share). The value of the real estate portfolio has been assessed at USD 346 million.