LAWFUEL – Press Release Service – Allen & Overy LLP said today that as the first sukuk listed on the London Stock Exchange, National Central Cooling Company (Tabreed) PJSC’s USD200 million Trust Certificates due 2011, paved the way for further sukuk issues to be listed on regulated markets in Europe, following the introduction of the EU Prospectus Directive.
The transaction is also the first rated sukuk by a corporate in the Middle East.
“This transaction represented a number of challenges from a structuring perspective, particularly as the intention from the outset was to achieve an investment grade rating for the sukuk from an international rating agency. As the sukuk was to be listed on a regulated market in Europe, the requirements of the EU Prospectus Directive relating to debt securities and how they apply to sukuk products, which, by their very nature, cannot be considered as debt, needed to be considered for the first time. We are delighted to have assisted in achieving these objectives and to pave the way for further sukuk issues to be listed on a regulated market in Europe,” said Anzal Mohammed of Allen & Overy’s General Securities Group.
The transaction structure involved both a construction (istisna’a) phase, during which Tabreed undertakes to construct and deliver district cooling plants in the UAE, and a leasing (ijara) phase, during which Tabreed agrees to lease the plants.
In order to achieve an investment grade rating for the sukuk from Standard & Poor’s, the transaction structure contained innovative features for a sukuk. These included a portion of the sukuk proceeds being invested on the issue date in Islamic capital protected deposits, which met a pre-agreed investment criteria, until Tabreed delivers the district cooling plants. As the issuer needed to hold tangible assets with a value of at least one-third of the aggregate face amount of the sukuk to achieve tradability from an Islamic perspective, a commodity trade feature was also introduced in the structure.
Allen & Overy advised Commerce International Merchant Bankers Berhad, Dresdner Bank AG London Branch and HSBC Bank plc, as joint bookrunners and joint lead managers, in connection with the issue of the USD200m Trust Certificates due 2011 by National Central Cooling Company (Tabreed) PJSC, through a trust company established in the Cayman Islands, Tabreed 06 Financing Corporation.
A team led by international capital markets partner, Roger Wedderburn-Day, advised the joint bookrunners and joint lead managers. Assistance was provided by Anzal Mohammed. A separate team led by partner Morgan Krone advised HSBC Trustee (C.I.) Limited, in its capacity as the Delegate. Assistance was provided by Torquil Gibbs.
Linklaters advised Tabreed and Walkers (Dubai) LLP advised Tabreed 06 Financing Corporation.
For further information please contact Campbell McIlroy ([email protected]) on +44 20 7330 2783.