Pakistan International Airlines (PIA) has returned to the Islamic financing markets with a multi-currency Shari'a compliant financing facility.
The $130 million financing, which is being offered in US dollars and Arab Emirates Dirhams, is based on an Shari’a structure comprising vouchers representing PIA seats as the underlying asset.
The National Bank of Pakistan, US bank Citi and Kuwait’s Warba Bank acted as mandated lead arrangers in the transaction.
The transaction was syndicated to local banks Bank Alfalah and United Bank as well as Bahrain’s Alubaf Arab International Bank, who participated in the commercial foreign currency deal.
In addition, Citibank is performing the account bank and security trustee roles.
In 2011, PIA issued its first Islamic receivable-backed financing in a $100 million transaction. The three-year facility was secured by PIA's ticket sales generated in the UAE and aggregated through IATA's billing and settlement plan, and through sales by general sales agents.