Stanford Marine Group’s (SMG) refinancing of its existing debt through a US$325mn overcame a number of key challenges to become one of the largest private sector syndications for a UAE-based corporate in 2015, potentially opening up the world of underwriting to private sector borrowers.
Deal At A Glance
• Award: Structured Finance Deal of the Year
• Deal Type: Structured Finance
• Location: UAE
• Borrower: Stanford Marine Group
• Mandated Lead Arranger, Underwriter, Investment and Security Agent: Noor Bank
• Mandated Lead Arrangers: Barwa, FGB, Qatar Islamic Bank
• Lead Arrangers: Ajman Bank, United Arab Bank
• Legal Advisers to Borrower: Holman Fenwick Willan
• Legal Adviser to Arrangers: Dentons
• Size: US$325mn
• Length: 5 years
• Use of Proceeds: To refinance existing facility and vendor loan repayments
Background
In April 2015 Noor Bank was mandated to lead a structured finance deal to help Stanford Marine Group refinance the Company’s existing facility with an upsize to repay the vendor loan. The final deal was completed by June 2015 – a tight deadline of less than two months – which was required in order to coincide with the repayment date of an existing facility. The deal was challenging for a number of reasons:
• management of mortgages in over 10 jurisdictions;
• repayment notices for the existing facility had to be served before syndication of the new deal;
• release and takeover of 31 shipping mortgages along with their registry within 24 hours; and,
• security release and takeover needed to occur on the same day as the disbursement.
Transaction Breakdown
Noor Bank, which ended up with a final hold of less than 15% on the facility, lead managed the structuring and underwrote the entire transaction, with the disbursement taking place at the end of June 2015. Barwa Bank, First Gulf Bank, and Qatar Islamic Bank were the mandated lead arrangers, and Ajman Bank, United Arab Bank also joined the deal as the Lead Arrangers. The deal was fully Shari’a compliant – successfully converting a dual-tranche conventional and Islamic facility into a single-tranche Shari’a compliant facility. “The deal was one of the first Islamic leveraged finance transactions in the region. Plus, requirement of hard underwriting made the deal even more challenging. This was in fact the largest single bank underwriting commitment given by Noor Bank since its inception. Besides various Islamic structuring and deal execution complexities, distribution of the transaction especially to the new set of banks was a task in itself. Given the various challenges, as a sole arranger we were able to successfully execute the transaction within a timeline of fewer than 60 days from the award of the mandate while ensuring we meet all of the Company’s objectives.” said Saadaat Yaqub Bajwa, Head of Wholesale Banking at Noor Bank, Dubai. The Winners’ Selection Committee said: “Stanford Marine’s Islamic syndicated structured finance facility set a new benchmark for structured finance in the region. Creative structuring enabled the borrower to access new pools of liquidity and successfully expand the number of its relationship banks.”
