Clifford Chance

Clifford Chance and Al-Jadaan and Partners Law Firm advise on innovative callable SAR1.3 billion Sukuk by SBG Sukuk Limited

Clifford Chance and Al Jadaan & Partners Law Firm has advised Saudi Fransi Capital Limited (the Saudi affiliate of Crédit Agricole Corporate and Investment Bank) in relation to the issuance of SAR1.3 billion sukuk al-ijara due 2015 by SBG Sukuk Limited.  The sukuk were priced at 170 basis points over 3 months SAIBOR and have a 2.5 year tenor, with a call option.

The sukuk structure developed is based upon ijara principles, however unlike classic ijara structures, investors will have the benefit of dual recourse.  At the heart of the structure is a prime land bank located in Jeddah, Saudi Arabia.  In addition to having recourse to Saudi Binladin Group Limited (as obligor), investors will have recourse to the land bank.  This structuring borrows principles from covered bond technology and in addition to the dual recourse features, the structure was developed to provide Saudi Binladin Group Limited with the ability to develop and sell the land during the life of the sukuk in a manner that would not prejudice the interests of the investors.

Stuart Ure, Capital Markets Partner at Clifford Chance, commented, "the structuring of this transaction entailed a close collaboration over the past year with Saudi Fransi Capital (SFC) and Saudi Binladin Group Limited.  We are delighted that the structure has accommodated the commercial objectives of Saudi Binladin Group Limited whilst providing investors with dual recourse to both corporate credit and real estate assets, which represents a further evolution of structuring in the market."

Clifford Chance, through the Dubai office advised SFC on the transaction.  The Clifford Chance team was led by Capital Markets Partner Stuart Ure, who was assisted by associates Mark Dickinson, Yasser Al-Hussain and Abdullah Al-Hazzani.  The Saudi Arabian team was led by Mohammed Al-Jadaan, who was assisted by senior associate Ose Asemota and associate Mansoor Al Hagbani.

Baker & McKenzie Limited acted as legal adviser to Saudi Binladin Group Limited whilst Walkers acted as legal adviser to SBG Sukuk Limited.

For further information about this release please contact Magdalena Suder.