Denton Wilde Sapte’s Dubai office, has advised the Government of Qatar on its inaugural US$700m sovereign Islamic bond Issue. The Issue is listed in Luxembourg and will be listed in Labuan.
The Issue is a landmark deal, being the first global Islamic sovereign rated issue in the Middle East. The only other rated global sovereign Islamic bond Issue to date was Malaysia in 2002 and was lead managed by HSBC. HSBC and QIIB were Lead Managers on the Qatar Issue.
The Qatar Issue was structured by HSBC, in accordance with the fundamental tenet of the Shariah that the receipt and payment of interest is forbidden. The Issue was structured so that the Issuer purchased a substantial land parcel, designated for the development of a medical city, from the Government of Qatar. The Issuer, in turn, leased the land to the Qatari Government to enable the Government to carry out the proposed development and issued floating rate trust certificates (sukuks) to investors, with pricing referenced against Qatar’s sovereign credit risk. The lease rental payment from the Government to the Issuer exactly matches the payments payable on the trust certificates.
Rahail Ali, partner in Denton Wilde Sapte’s Dubai office who led the team, said: “This is a landmark bond Issue. The resounding success of this Issue reflects the A+ credit rating of Qatar and the excellent co-operation between the Lead Managers, HSBC and QIIB, and the Qatar Ministry of Finance. We are proud to have advised the Government of Qatar.”
Dr. Magdi El Difrawi, Financial Expert at the Qatar Ministry of Finance, said: “I believe that we were well advised to have instructed Denton Wilde Sapte. They proved that they were up to the task and they worked very hard to add value to the transaction and secure a good deal for the Government of Qatar.”
Rafe Haneef, Associate Director of HSBC Amanah Finance, said: “Rahail’s team were excellent throughout. Their proactive and commercial approach was a significant contributor to the success of this transaction.”