Alkhabeer REIT enters into profit rate swap hedging agreement with Al Rajhi Bank

Logo of Alkhabeer REIT Fund

Alkhabeer REIT Fund entered, on July 27, into a profit rate swap hedging agreement with Al Rajhi Bank to fix the profit margin of the facilities used in the first additional offering of SAR 397.5 million at a fixed rate of 4.44%, fund manager Alkhabeer Capital said in a statement to Tadawul.

The purpose of the hedging facility is to protect the fund from rate fluctuations during the remaining tenor of the facility, starting from Sept. 1, 2021, to Sept. 7, 2025.

The development follows the credit facilities agreement signed by Alkhabeer REIT Fund with Al Rajhi Bank for SAR 1 billion, with a maturity of five years for any used amount.

A total amount of SAR 737.5 million has been used under these facilities, as follows:

- SAR 340 million for the fund's initial offering.

- SAR 397.5 million for the fund's first additional offering.

In September 2020, Alkhabeer REIT Fund inked a Shariah-compliant financing agreement with Al Rajhi Bank to obtain additional credit facilities of SAR 1 billion, in return for mortgaging income-generating properties, Argaam earlier reported.