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Clifford Chance advises on the United Kingdom's inaugural £200 million sukuk issuance

26 June 2014

Clifford Chance advises on the United Kingdom's inaugural £200 million sukuk issuance

Clifford Chance advises on the United Kingdom's inaugural £200 million sukuk issuance

Clifford Chance has advised HSBC Bank plc in its role as structuring bank and Barwa Bank, CIMB, HSBC Bank plc, National Bank of Abu Dhabi and Standard Chartered Bank as joint lead managers and also HSBC Bank plc as agent on the inaugural £200 million sukuk issuance by HM Treasury in the United Kingdom.

The sukuk uses an ijara structure, a Shari'a compliant leasing structure, which allows the rental income of three central UK government offices to underpin the transaction.

The first of its kind deal intends to establish London as a centre for Islamic Finance outside the Muslim world and further opens the UK market to future Islamic financings including sukuk issuances, enabling access to new sources of funding.

Commenting on the transaction, the Chancellor of the Exchequer, George Osborne, said “The issuance of Britain’s first sovereign sukuk delivers on the government’s commitment to become the western hub of Islamic finance and is part of our long term economic plan to make Britain the undisputed centre of the global financial system. We have seen very strong demand for the sukuk, resulting in a price that delivers good value for money for the taxpayer. I hope that the success of this government issuance will encourage further private sector issuances of sukuk in the UK.”

"We are very proud to be involved in such a landscape-changing deal. A sovereign issuance of this kind lays the ground work for future Islamic financings in the UK, opening the Islamic financial markets to companies, financial institutions and other governmental entities who seek new sources of funding" remarked Qudeer Latif, Global Head of Islamic Finance at Clifford Chance.

The Clifford Chance team advising the structuring bank and the joint lead managers consisted of Qudeer Latif (Partner, Global Head of Islamic Finance) and Debashis Dey (Partner, Capital Markets) in Dubai and Chris Davies (Partner, Global Head of Tax) and Franc Pena (Partner, Real Estate) in London.

Claudio Medeossi (Consultant) and Stuart Mason (Associate) in London advised HSBC Bank plc as paying agent and exercise agent.