Standard Chartered structures Islamic facility for SriLankan

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Standard Chartered Bank has structured a $150 million Islamic finance facility for SriLankan Airlines with a syndicate of UAE-based banks, local media reports indicate.

The bank is reportedly the sole structuring agent and joint mandated lead arranger for the multi-currency senior secured term financing facility.

The facility is partly secured by a government guarantee with preferential access to the airline’s IATA receivables from a number of countries.

Participants include Abu Dhabi Islamic Bank, Al Hilal Bank, Noor Bank and United Bank, which also acted as joint mandated arrangers and bookrunners.

“The proceeds of the facility will be used towards the refinancing of an existing facility and provide additional capital to support the airlines re-fleeting exercise,” Colin Pawley, head of client coverage at Standard Chartered, is quoted as saying in local media reports.

The airline will use $130 million to pay down an existing loan arranged by Dubai-based Mashreq Bank.

In July 2012, SriLankan closed its first international syndicated loan transaction with Abu Dhabi Islamic Bank, Al Hilal Bank, Noor Bank, Mashreq Al Islami and United Bank.

The four-year, $175 million Islamic structured facility was subscribed in US dollars and UAE dirhams.

Sri Lanka’s civil aviation minister Priyankara Jayaratne has appointed a committee to study the five-year business plan prepared by the national carrier.

Flightglobal’s Ascend Online database shows that SriLankan operates eight Airbus A320s, a single A321, seven A330-200s and six A340-300s.