Clifford Chance

Clifford Chance advises on the debut sovereign Sukuk issuance by the Kingdom of Morocco

Clifford Chance acted as legal counsel in the arrangement and structuring of the debut sovereign Sukuk issuance within the framework set out by the reform of Act 33-06 in relation to securitisation in 2013. This reform, in which Clifford Chance's team was involved alongside Maghreb Titrisation and the Ministry of Economy and Finance, opened up new perspectives for the financing of the economy through the introduction of an innovative regime for the issuance of Sukuk certificates, capable of supporting the development of Islamic finance initiated by the Kingdom of Morocco in the recent years.

In this context, the Kingdom of Morocco has decided to launch a Sukuk certificate issuance program, the first of which, intended for resident investors, amounts to one billion Moroccan dirhams. The Kingdom has provided a guarantee for an amount of MAD 1.1 billion. The National Sharia Board (Conseil Supérieur des Ouléma) gave its approval to this first issuance on 21 September 2018.
The Sukuk certificates to be issued under this programme have been structured as Sukuk ijara certificates. These Sukuk ijara certificates are backed by a right of usufruct on real estate assets that meet certain eligibility criteria and are leased back to their operators.

This innovative and strategic operation for the Kingdom of Morocco will enable the development of the Islamic finance market, increase liquidity from foreign investors and diversify the financing sources of the State and the public, private and semi-private sectors more generally. This operation was eagerly awaited by financial operators as well as investors, both Moroccan and foreign. This operation will very quickly pave the way for Sukuk issuances by Islamic banks to finance their operations, as well as by corporates more generally.

Clifford Chance's team involved in this transaction was composed of Mustapha Mourahib (Managing Partner) and Ouns Lemseffer (Counsel), as lead counsel alongside Maghreb Titrisation and the Ministry of Economy and Finance. Mustapha and Ouns also participated in the drafting of the reform of the securitisation law in 2013, which made this transaction possible, alongside Frédérick Lacroix, Partner in the Paris office and Head of Financial Services and Asset Management. The team also participated in the Republic of Senegal's debut Sukuk issuance in 2016 alongside Qudeer Latif, Partner in the Dubai office and Global Head of Islamic Finance.