Gulf Finance House has signed a murabaha (Islamic finance) agreement for a US$ 105 million credit facility from Kuwait Finance House Bahrain (KFH-Bahrain), an announcement said 27 August 2014. Both firms have operations and representations in Europe.
The five year facility, which will be extended to GFH on an amortized basis and with an 18 month moratorium, will be utilized by the bank to redeem two existing debt facilities with 27 syndicate participants and allows the release of major assets for GFH, said the announcement, emailed to The Middle East in Europe.
Murabaha, also known as mark-up or cost plus financing, is often used for financing across institutions that have embraced Islamic banking and finance, including institutions in Europe. Originally, the term murabaha was used to define a contract of sale in which a commodity was sold on profit.