SEDCO Capital signs hedge agreement with Al Rajhi Bank to fix annual financing fees

SEDCO Capital, the fund manager for SEDCO Capital REIT Fund, signed, on June 22, a Shariah-compliant hedging contract with Al Rajhi Bank, to keep the annual financing charges at a fixed rate of 1.43%.

The fund manager said in a bourse statement that the contract applies to the remaining facility of SAR 250 million (representing 51% of the total facility granted to the fund).

In addition, the contract will reduce the risks related to interest rates volatility on a tranche of the facility granted to the fund until Oct. 15, 2023.

The initiative will contribute towards the improvement of the fund’s operational performance and preserve the interests of the unit holders, it further added.

In May, SEDCO Capital had signed a Shariah-compliant hedging contract with Al Rajhi Bank to keep the annual financing charges at a fixed rate of 1.69% for a SAR 240 million facility.

On April 19, the fund manager announced it is exploring the possibility of entering into a hedging contract to stabilize the price of SAIBOR and benefit from the current price drop.