Jadwa REIT Al Haramain signs SAR 300 mln credit facility deal with Bank Albilad

Logo of Jadwa REIT Al Haramain

Jadwa Investment Co., the fund manager of Jadwa REIT Al Haramain, announced signing a Shariah-compliant credit facility agreement worth SAR 300 million with Bank Albilad, after obtaining the approval of the fund’s board of directors, according to a bourse filing.

Part of the amount will be used for repaying existing credit facilities worth SAR 253 million from Banque Saudi Fransi (BSF) in full, while the remainder will be used to finance the fund's investment objectives.

Jadwa also stated that signing the agreement resulted in a decrease in profit margin from 2%+ SAIBOR (six months) to 1.75%+ SAIBOR (six months), provided that the repayment of the full drawdown amount in one shot after five years. During the agreement term, only the cost of financing will be incurred, in addition to mortgaging the fund’s properties and issuing a promissory note as covenants to obtain the facilities.

Bank Albilad’s credit facilities will be the only outstanding debt for the fund after the full repayment of BSF’s credit facilities. There is no related party involved in this process, said Jadwa.

Jadwa expects the impact of the profit margin decline to be positive on the fund’s financial results over the next five-year period.