MTC signs $7.4bn Islamic loans

Kuwaiti telco signs two Islamic loans to help pay for licence it won to operate Saudi Arabian mobile network.

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By  Reuters Published  September 6, 2007

Kuwait's Mobile Telecommunications Company (MTC) has signed two Islamic syndicated loans worth a total of $7.39 billion via bookrunners BNP Paribas, Calyon, Citigroup and Samba, banking sources said on Thursday.

MTC has signed a 2-year 18.328 billion riyal ($4.89 billion) murabaha guarantee facility to help pay for the licence it won to operate Saudi Arabia's third mobile network, and a 2-year $2.5 billion murabaha facility that will be used to refinance the borrower's $1.2 billion murabaha facility signed in December 2006 and for general corporate purposes.

Murabaha is where a lender buys a commodity and sells it to a customer at a higher price, locking in profit and complying with Islam's ban on lending with interest.

MTC, which will start operating under the 'Zein' brand on Sunday, agreed to pay around $6.11 billion to set up the third Saudi mobile network.

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