CAIRO: The International Finance Corporation’s (IFC) Capitalization Fund will support expansion plans of Bahrain’s Ahli United Bank with a $125 million investment in equity and $165 million in subordinated debt.
A press statement said that the agreement will also see the maturity date of the existing $200 million subordinated loan raised in 2006 extended from 2016 to 2018, thereby increasing its capital effectiveness for AUB.
“IFC Capitalization Fund’s investments in Ahli United Bank will provide long-term capital resources to the bank as it expands regionally, and will strengthen its capital funding base in anticipation of the Basel III requirements coming into effect in 2013,” the statement read.
The IFC Capitalization Fund’s first investment in the MENA region is in line with plans to support the financial system of emerging markets and facilitate the greater regional economic and financial integration.
"The IFC Capitalization Fund’s…landmark capital raising transaction will have a major impact on its regional growth and business development. IFC has proved to be a reliable strategic partner especially in these challenging times,” said Adel El-Labban, Group CEO and managing director of Ahli United Bank.
The deal represents the “largest investment by any international body in a financial institution anywhere in the region.” It also “demonstrates AUB’s success in mobilizing capital funding at optimal cost and in structuring a sophisticated mix of Tier I and Tier II capital, in a manner similar to its major OECD counterparts,” added El-Labban.
“The Capitalization Fund’s investments will support Ahli United Bank during a challenging time for markets in the Middle East and North Africa region,” said Marcos Brujis, who heads the IFC Capitalization Fund.
“The expansion of Ahli United Bank will support trade, financial flows, and provide access to finance for underserved segments of society in the region’s frontier and emerging countries,” said Rashad Kaldany, IFC vice president for Asia, Eastern Europe, Middle East and North Africa.
The IFC Capitalization Fund is a global equity and subordinated debt fund founded by the International Finance Corporation, a member of the World Bank Group, and the Japan Bank for International Cooperation.
