It executed a swap with the "Mashreq", covering 56% of its total debts
"Emirates NBD REIT" is hedging a facility of 400 million dirhams
Emirates NBD REIT is a real estate investment fund managed by Emirates NBD Asset Management. ■ archive
Emirates NBD REIT executed a profit rate swap in compliance with the provisions of Islamic Sharia law with Mashreq Bank, including facilities in the amount of 400 million dirhams covering 56% of the total debts owed by the company.
The company stated in a statement yesterday that the agreement will set the variable rate for the interest rate offered between UAE banks (EIBOR) for a period of two years, beginning in June 2021 and ending in June 2023.
She indicated that in light of the Corona pandemic and the fluctuations in the real estate market, the company's management focuses on mitigating the negative impact on its business, by reducing costs and maintaining low levels of them.
Anthony Taylor, head of the real estate division at Emirates NBD Asset Management, said, “Our priority for this year is focused on managing cost reduction and keeping it at optimum levels, as this has been achieved in a number of areas, including our real estate portfolio, especially after we announced Earlier this year, the company announced the reduction of management fees and the remuneration of the Board of Directors and members of its committees.
Taylor added, “Given the low interest rate environment, we have a strong opportunity in the coming period to reduce financing costs, which are the biggest expense of Emirates NBD REIT. Therefore, we took advantage of this opportunity by agreeing on a profit rate swap with Mashreq Bank, which will hedge against More than half of our total outstanding debt until June 2023 ».
On his part, Head of Corporate Banking and Investment Services at Mashreq Bank, Joel Van Dawson, said: “The bank is pleased to provide Emirates NBD REIT with this customized solution. We are still strongly committed to supporting our customers with the various financing requirements they need, especially during this difficult period.” .
He added, "This deal reaffirms our ability to provide innovative risk management solutions, especially with regard to the needs of our clients, and to offer them the possibility to mitigate and hedge certain risks, as well as provide greater certainty."
It is noteworthy that "Emirates NBD REIT", (a closed investment company), is a real estate investment fund that operates in accordance with Islamic Sharia law, and is managed by Emirates NBD Asset Management Ltd.
Reducing fees and bonuses
Emirates NBD REIT announced in June 2020 that it had reduced administrative fees by 20 basis points, which is equivalent to a 13% reduction in total management fees (up to a maximum of 25% of the previous year's fees), for a period of six months, effective December 31, 2020. .
The Board of Directors and the committees agreed to deduct 13% of the bonuses for the same period, with the support of the shareholders in both initiatives during the hypothetical annual general meeting, which was held on July 1.
The total dividends payable to shareholders for the year ended March 31, 2020 amounted to an annual dividend yield of 4.35% of the net asset value distributed, and 11.2% of the company's share price.
- The agreement will set the variable rate for EIBOR for a period of two years, starting from June 2021.