UAE banks have arranged an Islamic structured facility of $175 million (Dh642 million) for the state-owned carrier Sri Lankan Airlines.

Abu Dhabi Islamic Bank (Adib), Al Hilal Bank, Mashreq Al Islami, Noor Islamic Bank and United Bank Limited arranged the facility as Mandated Lead Arrangers and Bookrunners The facility structure is as per Islamic Shariah principles and was subscribed in US dollar and UAE dirhams.

Mashreq Al Islami acted as the Coordinating Bank.

For Sri Lankan Airlines, this financing marks their debut in the international syndicated loan market. The facility is repayable over a period of four years from assigned ring-fenced cash flows with suitable credit enhancements.

The signing ceremony took place in Colombo and was attended by senior management of SriLankan Airlines, some Board members and senior representatives from the Banks.

John Iossifidis, Head of International Banking Group, at Mashreq said, "The successful closure of this transaction is clear evidence of the growing acceptance of Sri Lanka credit story in international markets".

He emphasized the growing importance of Sri Lanka in the region and how Mashreq, in conjunction with its other key partner banks, have been instrumental in closing the facility despite the difficult global liquidity conditions continuing.

He said: "Sri Lanka is a key strategic market for Mashreq and we are committed to working alongside our core relationship clients, to explore different forms of capital raising." (Emirates24/7)