Euromoney has been informed by a source claiming to have been close to an eight-figure deal that cash-rich Saudi Islamic bank Al Rajhi entered into with troubled US bank Bear Stearns just before Christmas.
The transaction, which was made Islamic through a commodity-based structure, amounted to a deposit, according to the source, and will mature at the end of the 2008, with the possibility of being renewed thereafter.
"For Bear Stearns, this was an alternative source of debt. It’s the first time that it has borrowed – effectively borrowed – from an Islamic financial institution," the source tells Euromoney.
The credit crisis makes the deal sensitive, says the source. Indeed, both Al Rajhi and Bear Stearns denied any knowledge of the transaction when contacted by Euromoney.
