16 May 2019
Clifford Chance advises on the first ever green sukuk in the GCC
Clifford Chance has advised Majid Al Futtaim Holding LLC (Majid Al Futtaim) in relation to the issuance of US$600 million 10-year fixed rate trust certificates by MAF Sukuk Ltd. (the Certificates). The Certificates have been issued pursuant to MAF Sukuk Ltd.'s and Majid Al Futtaim Properties LLC's trust certificate issuance programme which is irrevocably guaranteed by Majid Al Futtaim.
The Majid Al Futtaim group is one of the largest developers and operators of shopping malls and hypermarkets in the MENA region. Founded in Dubai in 1992 to bring the first regional shopping mall to the Middle East, Majid Al Futtaim's activities have since grown to include hotel development and the provision of synergistic leisure and entertainment products and services. As at 31 December 2018, Majid Al Futtaim operated 23 shopping malls, 108 Carrefour hypermarkets, 156 Carrefour supermarkets and a number of other entertainment offerings (including 35 cinemas), predominantly located in the MENA region.
This transaction marks Majid Al Futtaim's debut "green" issuance and is the first green sukuk issuance by a GCC corporate. Proceeds from the Certificates will be used in accordance with the Majid Al Futtaim group's Green Finance Framework to finance or refinance eligible projects within the categories of renewable energy, energy efficiency, sustainable water management and/or green buildings.
The transaction was highly successful with an order book of around US$3 billion and pricing tightening from initial pricing guidance of 245bps over mid-swaps to final pricing of 220bps over mid-swaps.
Partner Stuart Ure, who led the Clifford Chance team commented: "We are delighted to have supported the company on this ground-breaking transaction which once again demonstrated the strong international demand for the Majid Al Futtaim credit, including developing a new investor base investing on sustainable principles".
The Certificates are rated BBB by each of S&P and Fitch and are admitted to listing on Euronext Dublin and Nasdaq Dubai. HSBC acted as the sole green structuring advisor while HSBC and Standard Chartered Bank acted as joint global co-ordinators. Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Gulf International Bank, HSBC and Standard Chartered Bank acted as the joint lead managers and joint bookrunners.
The Clifford Chance team comprised Stuart Ure (Partner), who was assisted by Alekhya Prakash (Senior Associate) and Matthew Oliver (Trainee Solicitor).