King & Spalding, SNR Denton and Ogier have played a role in advising a benchmark yield offering from the Islamic Development Bank (IDB) – the US$750m Saudi-issued dual-listed sukuk that many hopes mark the return of GCC-originated, US-denominated sukuks.
According to King & Spalding Dubai-based partner Rizwan Kanji who led the team advising the IDB, the transaction is expected to kick-start a thus-far lackluster sukuk market that has seen a period of relatively low issuances. “This transaction is important because it sets a benchmark yield for IDB risk and perhaps a benchmark for other issuers to reflect what the market may be willing to pay,” he said. The Middle East has to-date witnessed sovereign-linked or quasi sovereign Issuers tapping the market.
“These are highly-rated and therefore deemed a low risk for the investor base but which provide lower yields compared to other potential issuers.”
Kanji predicts that the upswing will gain traction from September. “The recent flurry of issuances will assist in providing impetus to the debt capital market generally and sukuk issuances in particular. Summer and Ramadhan are relatively quieter periods in terms of issuances coming to market – I believe there will be a further flurry post-September of issuances coming to market. The pipeline of transactions we are working on and will potentially be working on substantiates this resurgence,” he said.
Kanjji’s relationship with IDB began prior to him joining King & Spalding. Kanji advised on the establishment of IDB’s US$3.5bn Trust Certificate programme whilst at a previous firm. The relationship has continued on after he left to join King & Spalding’s partnership in January 2011.
The joint lead managers on the transaction which was dual-listed in London (LSE) and Malaysia (Bursa Malaysia) were BNP Paribas, Deutsche Bank A.G. (London branch), HSBC and Standard Chartered Bank.
SNR Denton advised the joint lead managers. Ogier advised the Jersey SPV - IDB Trust Services Limited.
There was no Malaysian counsel - HSBC Malaysia handled the Bursa Malaysia listing.ALB
Other related stories:
