This document discusses a financing deal between Ak Bars Bank in Russia and banks in the United Arab Emirates and the United Kingdom. It describes the structure of the deal, which involved Ak Bars Bank obtaining financing through a murabaha commodity transaction structure. This allowed Ak Bars Bank to purchase commodities from a supplier using funds from participant banks, and then immediately resell the commodities to repay the cost plus a markup for profit. The document provides details on the multi-step process and considerations for using commodities like precious metals warrants that fulfill Islamic financing requirements. It also asks questions about the origins and challenges of the deal, as well as prospects for future similar financing transactions between Russia and Middle East investors.

1. Опыт привлечения финансирования из ОАЭ:
сделка Ак Барс Банка
Альберто Бруньони, ASSAIF (Италия)
Рустам Вахитов, International Tax Associates
(Нидерланды)
Москва, 4 июня 2013

2. DEAL OF THE YEAR
- 2011
© 2013. International Tax Associates. UFS Group. All rights reserved.

3. STRUCTURE OF THE DEAL
© 2013. International Tax Associates. UFS group of companies.All rights reserved.
Financing
City Bank Ak Bars Bank
UAE/UK
Russia
Banks
© 2012. International Tax Associates. UFS group of companies.All rights reserved.
Financing

4. HISTORY OF THE DEAL
© 2013. International Tax Associates. UFS Group. All rights reserved.
1. What was the strarting point of the deal?
2. What was the most difficult part?
3. When you did realize that the deal is real?
4. Do you believe that other similar transactions can
be organized in Russia ?
5. Which projects are potentially interesting for
Middle East investors (infrastructure projects, lease
of airplanes, trade financing etc.?)

5. STAGE 2: AK BARS BANK’S SYNDICATED FACILITY STRUCTURE -
COMMODITY MURABAHA
AK BARS Bank
as Purchaser
MLA as
Investment Agent
Commodities Supplier
Participants
1.Participations4.Commodities
7. USD Deferred
payment
Commodities Buyer
5. Commodities
3. Commodities
2. USD Spot payment
6. USD Spot payment
Steps 1 to 6 are intra day on
Day One !
Steps
1. Syndicate banks fund mandate Lead Arranger
(MLA) as Investment Agent
2. MLA as Investment Agent enters into a contract
with a commodity broker for the purchase of
the Commodities
3. The purchase is on a spot basis, with
immediate payment and delivery
4. MLA simultaneously enters into a contract for
the resale of the commodities to AK BARS as
Purchaser, for immediate delivery but payment
by AK BARS on a deferred basis at the agreed
cost plus a mark-up (i.e., LIBOR plus a spread)
5. AK BARS, in turn, appoints MLA as its agent
for the resale of the same Commodities to a
third party, again on a spot basis
6. The Commodities Buyer pays USD for the
commodities against delivery
7. AK BARS has until the end of the deferred
payment period to pay the Investment Agent
(MLA) the agreed cost-plus price
N:B: Commodities
Warrants for precious and non-precious metals listed on the London Metals Exchange (LME) are most commonly used in this
structure as the underlying metals fulfil the following key criteria: eligible (i.e. not repugnant to Islam); physical; allocated (i.e.
identifiable in actual amount, location and specification); capable of delivery; and unencumbered (with freely transferable title)
5