Thursday, July 23, 2015
LCI Claims First Islamic-Compliant Deal
The leasing firm LCI has completed what it claims is the first helicopter leasing transaction that complies with Islam’s anti-usury precepts. That religion generally prohibits the acceptance of interest or fees for loaning money. LCI said the multi-year financing arrangement, a secured helicopter pre-delivery payment covering the Airbus H175 and H225e, is a “master Murabaha facility agreement.” Such an agreement is similar to a rent-to-own deal. For example, the outfit that wants the helicopters arranges for a third party to buy them. That party then sells them to the outfit at a profit equivalent to the proceeds of interest payments. The outfit can pay the profit in a lump sum or in installments. Because no interest is charged, such a transaction is considered to comply with Islamic religious law.