Bahrain-based Oil and Gas Holding Company or nogaholding has refinanced its US$1.6 billion Murabahah facility, upsizing it to a US$2.2 billion dual-tranche sustainability-linked facility, making it the largest sustainability loan in Bahrain and the Middle East. Maturing in September 2026, the facility employs Day 1 Secured Overnight Financing Rate (SOFR) mechanics. The sustainable refinancing is part of the company’s ongoing strategy to transition from an oil and gas company to a responsible energy company.
The refinancing took a dual-tranche approach in contrast to its original Murabahah facility to access liquidity from both Islamic and conventional banks, diversifying nogaholding’s sources of liquidity. The new facility was more than two times oversubscribed, with participation from 22 banks across the Kingdom of Saudi Arabia, the UAE, Kuwait, Bahrain and South Asia.
“As the company’s first sustainability-linked corporate financing facility, it utilizes key performance indicators (KPIs) related to greenhouse gas emission reduction as well as safety measures. The proceeds will be used to expand and diversify nogaholding’s oil and gas assets to ensure it aligns with the United Nations Sustainable Development Goals featured in the Bahrain Economic Vision 2030,” Linklaters, which acted as the legal advisors for the company, shared.
This refinancing was structured at the height of the Islamic finance space’s call for the establishment of an Islamic benchmark financing reference rate. The global shift away from the London Inter-Bank Offered Rate (LIBOR) to SOFR due to its less risky nature has been a challenge in the refinancing process.
“One of the challenges faced by nogaholding in the refinancing is the transition from LIBOR to SOFR and to the choice of overnight (compounded) SOFR vs term SOFR. Another challenge was complying with the newly established AAOIFI standards in relation to the adaption of SOFR in Islamic Murabahah facilities,” a spokesperson from nogaholding shared with ISFI.
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nogaholding sustainability-linked dual-tranched facility US$2.2 billion  10th May 2022
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| Summary of terms and conditions | |
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Aggregate principal amount |
US$2.2 billion |
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Type of facility |
Dual-tranche (conventional and Islamic) financing facility |
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Structure |
Senior unsecured conventional and Islamic sustainability-linked term facility |
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Use of proceeds |
General corporate purpose facility |
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Tenor |
4.5 years |
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Profit rate/yield |
210bps+CAS 90 days+ overnight SOFR |
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Repayment |
Bullet |
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Frequency of payment |
Quarterly |
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Legal advisor(s) |
Linklaters (borrower side) Norton Rose Fulbright (lender side) |
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Initial mandated lead arranger(s) |
Gulf International Bank, Mashreq Bank |
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Bookrunner(s) |
Gulf International Bank, Mashreq Bank |
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Sustainability coordinator(s) |
Gulf International Bank, Mashreq Bank |
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Coordinator(s) |
Al Ahli Bank of Kuwait, Gulf International Bank, Mashreq Bank |
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Underwriter(s) |
Al Ahli Bank of Kuwait, Gulf International Bank, Mashreq Bank |
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Structuring bank |
Gulf International Bank |
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Global facility agent |
Gulf International Bank |
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Governing law |
English law |