The transaction is SEC’s first international sukuk issuance and the largest international debt capital markets issuance to date out of Saudi Arabia. The transaction was structured as a sukuk al-ijara, with the two series of trust certificates issued by Saudi Electricity Global SUKUK Company (a special purpose vehicle incorporated in the Cayman Islands and wholly-owned by SEC).
The Allen & Overy team was led by London-based partners Atif Hanif* and Jamie Durham, and Riyadh-based partner, Zeyad Khoshaim.
Commenting on the deal, Atif Hanif said: “We are delighted to have advised SEC on the issuance of this ground-breaking sukuk. The transaction is significant in both its size and tenor. The fact that SEC was able to obtain a tenor of ten years for the USD1.25 billion series and that the total order book for the two series was in excess of USD17.5 billion are remarkable in the current financial climate. The success of the transaction also demonstrates there continues to be strong investor demand for quality paper in the international sukuk market. We expect this transaction to act as a benchmark for future international issuances from the Kingdom and other GCC countries.”
Zeyad Khoshaim added: “The completion of this transaction follows the successful closure of a number of high-profile sukuk issuances in Saudi Arabia in recent months, including the issuances by Sipchem, SATORP, GACA and Almarai Company. Allen & Overy’s involvement in all these transactions further cements our position as the leading Islamic finance law firm.”
This is the latest successful closure in an outstanding twelve months for Allen & Overy’s Islamic Finance Group. Recent notable transactions include advising on the ground-breaking GACA sovereign sukuk, which was the largest ever sukuk in the Kingdom and the first Saudi sovereign sukuk. This was closely followed by advising on the establishment of the Almarai programme, which was the Kingdom’s first domestic sukuk programme, and the subordinated Tier II sukuk issue by The Saudi British Bank. Allen & Overy has also recently advised Sipchem on its SAR1.8bn debut sukuk issue and SATORP on its SAR3.749bn sukuk issue.
The significant volume of recent sukuk issuances out of Saudi Arabia demonstrate the strength and depth of the domestic Saudi debt capital markets and shows that there is generally strong investor demand for Saudi paper.
* Atif’s appointment as partner will come into effect on 1 May 2012.
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