Norton Rose Fulbright advises on world-first US$1.1bn sustainability-linked financing to a financial institution

Global law firm Norton Rose Fulbright advised HSBC Bank Middle East Limited, HSBC Saudi Arabia and 10 other financial institutions, as mandated lead arrangers, on a US$1.1bn, sustainability-linked, dual-tranche murabaha financing to Ahli United Bank in Bahrain, completed on 3 July.

The facility is the first example of a sustainability-linked, dual-tranche murabaha financing to a financial institution, globally. One tranche represents a facility compliant with the Sharia standards set out by the Accounting and Auditing Organization for Islamic Financial Institutions and the other tranche represents the traditional commodity murabaha facility structure historically used in the market.

The pricing of the facility was linked to three Key Performance Indicators (KPIs), relating to green financing, social housing financing and ESG governance integration, with each KPI based on specific Sustainability Performance Targets. 

The Norton Rose Fulbright team was led by Dubai and Riyadh-based, banking and finance partner Robin Balmer and Dubai-based senior associate Seya Rahnema, supported by trainee James Tobin and senior paralegal Jordan Fry.

Robin Balmer said “This was a real team effort, with ourselves, HSBC, Ahli United Bank and each of the sustainability coordinators, bookrunners, mandated lead arrangers, financial coordinators, Sharia scholars and legal counsels – among others – all working together to ensure the successful closing of the transaction.”

Seya Rahnema said: “This was an extremely exciting opportunity to be part of the first ever sustainability-linked, dual-tranche murabaha financing to a financial institution.”