SEDCO Capital, the fund manager for SEDCO Capital REIT Fund, signed a Shariah-compliant hedging contract with Al Rajhi Bank on May 18, 2020, to keep the annual financing charges at a fixed rate of 1.69%.
The fund manager said in a bourse statement that the contract is applicable to a corpus of SAR 240 million (representing 49% of the total facility granted to the fund).
Additionally, the contract will reduce the risks related to interest rates volatility on a tranche of the facility granted to the fund until Oct. 16, 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.
The fund manager said it will evaluate opportunities to ink hedging agreement for the remainder of the facility over the coming period, and any developments will be announced in due course.
On April 19, SEDCO Capital 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, Argaam reported.
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