Arc & Co. has structured a £1,485,000 Commodity Murabaha (CM) facility on behalf of its established client, secured against an unencumbered regional office building in Nottingham.
The facility was provided by Habib Bank Zurich plc (HBZ) via its intermediaries team.
The property, currently occupied by two tenants, was in the process of re-gearing leases at the time of execution.
The borrower sought to release equity to support a pipeline of development projects.
Despite the leases being held over, Habib Bank Zurich intermediaries team was able to take a commercial and flexible approach, providing terms that recognised the asset’s underlying strength and income profile.
The transaction was structured under an Islamic financing arrangement, with a profit margin of 2.75% and finance-to-value (FTV) of 55%.
As a feature of the Commodity Murabaha facility, there were no early repayment charges (ERCs).
During the process, the Bank expressed a preference for longer-term lease commitments to provide additional security, requesting 3- and 5-year lease terms.
However, given the strength of the borrower and the quality of the underlying asset, Philip Kay (pictured), director at Arc & Co., negotiated with HBZ to accommodate the shorter leases.
Kay said: “This was a great example of a lender taking a pragmatic view on a strong regional asset and supporting a client with a clear growth strategy.
“The Intermediaries team (notably Fahad Khan) at Habib Bank Zurich plc maintained excellent communication and follow-up throughout the process and demonstrated flexibility in providing an Islamic facility where other lenders may have struggled with the short lease terms.”
Fahad Sartaj Khan, senior relationship manager at Habib Bank AG Zurich, added: “Philip has conducted himself with exceptional professionalism throughout the transaction, truly embodying the values and ethics of Arc & Co. from case submission to completion.
“We greatly appreciate his approach and look forward to working with him—and the wider Arc & Co. team—on future opportunities.”
