Musharaka Financial Company’s announcement of the occurrence of a specific event on the Musharaka REIT Fund
13 November 2022
Musharaka REIT Signs SAR 1 Billion Shariah-Compliant Financing Agreement with Bank Aljazira
Musharaka Financial Company, the fund manager of Musharaka REIT, has announced the signing of a Shariah-compliant Murabaha financing agreement with Bank Aljazira. The financing facility has a maximum limit of SAR 1 billion and a tenor of seven years, with the full repayment scheduled at the end of the seventh year.
The financing is secured by mortgaging a portion of the fund’s real estate assets along with a promissory note guarantee.
Expected Impact on Musharaka REIT
The facility is aimed at supporting the fund’s investment strategy while reducing risk exposure. The fund manager expects a positive impact on the fund’s overall performance, as the financing will:
Diversify borrowing risks
Reduce debt coverage ratio
Lower the minimum interest coverage ratio
Increase the maximum leverage ratio
These enhancements will help Musharaka REIT achieve its strategic objectives, enabling further acquisitions of income-generating real estate assets that benefit both the fund and its unitholders.