28 April – LAWFUEL – The Law News Network – International law firm Norton Rose has advised on the first ever transaction in the shipping sector to use an Islamic bond issue. The unquoted private issue utilised an Ijara (lease) Sukuk arrangement through a Jersey based issue vehicle. The firm acted as counsel to the Islamic issue vehicle arranged by ABCIB Islamic Asset Management Limited. Supporting the Sukuk was a lease financing of the VLCC, Venus Glory, under which the vessel was able to remain in the ownership of the Pacstar Group and continue to be charterered to Vela International Marine Ltd.
Norton Rose’s head of Islamic finance, Neil D. Miller, said:
“This transaction has brought together Norton Rose’s key strengths in Islamic finance and shipping finance. We have worked with ABCIB to enable them to introduce Islamic investors into an otherwise conventional ship finance transaction which has given the owners access to a new source of mezzanine financing at a competitive price. The investors are able to make their Islamically compliant investment via the purchase of Sukuk (an Islamic term for notes) which give them a beneficial right in the use of the vessel. We were then able to apply this investment into a pre-existing leasing structure.
“The benefit of this structure is that it did not interrupt the pre-existing leasing chain and also allowed conventional finance to continue to be taken by the owners. This type of transaction can be tailored to many types of shipping transactions and we look forward to working with our banking and shipping clients on future transactions using this structure.”
The Norton Rose team was led by Neil D. Miller and assisted by Davide Barzilai in London.
Norton Rose is at the forefront of innovation for Islamic finance and was recently named best legal adviser in Islamic finance by Euromoney. The firm has acted on the establishment of the first Islamic bank in the UK (Islamic Bank of Britain), acted on the largest Islamic tranche utilised to date in a project financing (an Ijara based facility of US$530 million for the financing of the QatarGas II LNG Liquefaction facilities) and also acted for the arrangers on the only LNG carrier financed to-date solely using Islamic finance techniques, Brunei LNG’s m.v. “ABADI”.
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Notes for editors:
Norton Rose is a leading international law firm which operates through a network of offices in Europe, the Middle East and Asia. The firm has over 200 partners, over 1000 fee earners and 2000 staff worldwide.
Norton Rose focuses research, know-how and expertise on five strategically important areas where the firm and its clients have particular interests: international corporate finance, financial institutions, transportation, energy and infrastructure and technology (including IP and IT).
In all these areas, the firm works primarily for international corporates and financial institutions on large, complex, cross border transactions, offering them the full range of business legal services. More detailed information on the Norton Rose international team is available on the firm’s website at: www.nortonrose.com