Joint law venture Allen & Overy Shook Lin & Bok advised HSBC in a recent deal in which for the first time a sovereign developed Islamic debt without having gone through a conventional capital market. HSBC developed and implemented Brunei Darussalam’s Ijara-based Islamic debt programme as well as the first issue under the programme, a Br$150 ($127.31) million debut issue of Islamic sukuk (trust certificates). The transaction was launched on 6 April.
The HSBC programme is structured to permit periodic issues of short term financial assets known as sukuk al-ijara, backed by property and leases, which are compliant with Islamic law. It is also the first Islamic money market programme, ijara (lease-to-own), implemented anywhere in the world. Unlike other issues of sukuk, which feature certificates that pay periodic ‘profit’ distributions, this will involve short-term sukuk, which will be issued at a discount.
Partner Kenneth Aboud and associate Cheam Li-Shenn worked on the team advising HSBC.
The Allen & Overy Shook Lin & Bok Joint Law Venture was established in Singapore in September 2000. Since then it has advised on various Islamic finance deals, including advising UBS and Noriba Bank as joint lead managers in relation to a sukuk-al-ijara offering featuring US$350 ($466.2) million of trust certificates and involving the Sarawak Economic Development Corporation.