Clifford Chance

Clifford Chance advises on Garuda Indonesia US$500 million sukuk

Leading international law firm Clifford Chance has advised 15 banks on the international aspects of Garuda Indonesia's US$500 million sukuk. The sukuk is the first ever offshore US dollar offering by an Indonesian corporate issuer, and the first sukuk issuance utilising the airline capacity structure (as part of a sukuk-al-wakala structure) in Asia.

It is anticipated that Garuda Indonesia will use part of the money raised from the sukuk issuance to refinance its debt (including Garuda Indonesia's existing US$400 million shariah-compliant refinancing, on which Clifford Chance also advised), with the rest being used for general purposes, including capital expenditure.

The issuance highlights Clifford Chance's continued expertise in market-leading cross-border Islamic financing deals. The transaction also demonstrated the breadth of Clifford Chance's specialist regional and product-specific knowledge, with the team comprising Dubai-based Islamic finance experts with debt capital markets execution being led out of Singapore.

Commenting on the deal, Global Head of Islamic Finance at Clifford Chance, Qudeer Latif said, "We are pleased to work on another significant Islamic finance transaction for a client in Asia Pacific. Recent activity suggests there is increased interest in these deals, and our cross-border expertise helps us to execute them."

Counsel Gareth Deiner added "This transaction paves the way for other corporate issuers in the region, particularly state-owned enterprises in Indonesia, to bring similarly structured products to the global Islamic finance market."

The team recently worked on the US$2 billion Republic of Indonesia sukuk, the US$1.5 billion Government of Malaysia sukuk, the award-winning EXIM and Axiata sukuk programmes, the US$2.5 billion Cagamas sukuk and conventional programme and Garuda Indonesia's US$400 million shariah-compliant financing.

The team advising the joint lead managers was co-led by partners Stuart Ure and Qudeer Latif and consisted of Gareth Deiner (Counsel - Singapore), Ying Chiang Chong (Senior Associate – Singapore), Shauaib Mirza (Senior Associate – Dubai), Jessica Eilts (Associate – Dubai) and Eugenia Tan (Associate – Singapore). Clifford Chance's associate Indonesian firm, Linda Widyati & Partners, advised the banks as to the Indonesian law aspects of the transaction; the team included partner Arisia Pusponegoro, associate Dinasti Brian Harahap and trainee associate Salma Izzatii. A separate team in Hong Kong led by partner Matt Fairclough and consultant James Booth advised The Hongkong and Shanghai Banking Corporation as the delegate.