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Addendum announcement from Mulkia Investment Company regarding a fundamental change on Mulkia Gulf Real Estate REIT

Date of the Previous Announcement: 2020-12-29 Corresponding to 1442-05-14
URL of the Previous Announcement: link
Subject of change:
In addition to the announcement of a Mulkia investment company (“Mulkia Gulf Real Estate REIT Fund”) published on 14/05/1442 H, 29/12/2020 on its website and on the Saudi Exchange site, about signing an Islamic Shariah compliant financing agreement for Mulkia Gulf Real Estate REIT fund with Alrajhi bank worth SAR 600 million and with a maturity of seven years ending on 28 December 2027, of which SAR 577.39 million has been used to date, Mulkia Investment Company in its capacity as a fund manager of Mulkia Gulf Real Estate REIT Fund would like to announce the signing of a hedging Shariah compliant agreement with Al Rajhi Bank on 5 April 2022, in order to fix the reference price for the cost of financing (Saibor) for a portion of the financing equals 100 million riyals. This was done by fixing the Saibor margin for this part of the financing at a rate of 3.71% annually until the date of repayment of the financing. Saibor’s margin is currently approximately 2.43%, with the rest of the fund’s outstanding loans still subject to a variable margin.
Mulkia Investment Company has hired Ehata Financial as a licensed financial advisor specializing in this type of contracts in order to ensure that the Fund receives the best conditions and prices based on current market conditions. The Fund Manager will continue to assess the possibility of executing a hedging contract for the remaining amounts of funding in the coming period, with any developments to be announced in due course On the Saudi Exchange site and the fund manager’s website

The Impact Caused by the Change: This change is expected to improve the Fund’s operational performance and protect the Fund’s returns from the impact of interest rate volatility as a result of the stabilization of the (SAIBOR) margin rate for part of the financing until the end of the term.
Additional Information: There are no additions