Standard Chartered and Noor Islamic have jointly arranged a five year loan worth $175m to refinance Stanford Marine Group, an offshore supply vessel owner and operator, and build their fleet.
Standard Chartered, which acted as the facility agent, investment agent, and hedging bank, said that the proceeds of the term loan have partly been used to refinance Stanford Marine’s existing debt.
Part of the loan will also be used to buy second hand vessel or build offshore supply vessels.
The other banks in the funding arrangement included Barwa Bank (Qatar), Mubadala GE Capital and Abu Dhabi Commercial Bank (ADCB).
Standard Chartered regional head of shipping finance for Middle East Knut Mathiassen said that the difficult market conditions that prevailed during the fourth quarter of 2011, imposed critical challenges on the lending market.
"With most European shipping finance banks retreating, on the back of the Eurozone crisis, this led to tightened USD liquidity pool and rising USD cost of funding," Mathiassen said.
"Consequently, we had to explore other sources of bank funding, such as the local currency (AED) and the Islamic liquidity."
The deal comprised of a conventional term loan and a commodity Murabaha Shariah compliant facility sharing a security pool of 21 vessels.
Noor Islamic Bank acting head of corporate banking Kazim Ali said, "This was a complex deal, due to the tight timelines and the mortgaged vessels being flagged in different jurisdictions."