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03/18/2008 / BAHRAIN
Calyon, appointed sole arranger and underwriter for a USD 350 million Sukuk (Islamic bond) for the Ministry of Finance of Bahrain
Calyon has just closed a USD 350 million SukukIslamic Bond. Similar to an asset backed bond, Sukuk is a form of commercial paper that provides an investor with ownership in an underlying asset, and a return based on this ownership. The issuing entity needs to identify existing assets to sell to the Sukuk investors, via transference to an SPV.
The Sukuk investors then have a proportionate beneficial ownership in these assets. Investors typically take on the credit risk of the issuer rather than real asset risk on the assets owned by the SPV.
Sukuks can be listed and rated, though this is not necessary, depending on the target investor market. Sukuks are typically issued by corporate issuers, and some Financial Institutions, and also by Governments (Bahrain, Malaysia, Pakistan).
(Islamic bond) for the Ministry of Finance of Bahrain through the Central Bank of Bahrain. Calyon was appointed sole arranger and underwriter on the transaction which attracted firm interest at 2.5 times the target issue amount. This was the first Sukuk issue from the Government of Bahrain since 2004 and represents an important new benchmark issue from a prime name in this rapidly growing market. The Kingdom of Bahrain remains at the heart of the Islamic banking industry and this issue exemplifies the commitment to the development of this market. The issue carries an A rating from S&P and Fitch. The transaction structure and documentation was reviewed and approved by a board of eminent ShariaIslamic law as revealed in the Quran and through the example of Prophet Muhammad.
A Sharia compliant product meets the requirements of Islamic law.
Sharia Board is the committee of Islamic scholars available to an Islamic financial institution for guidance and supervision in the development of Sharia compliant products. scholars. Simon Eedle, Head of Islamic Banking at Calyon, emphasized the importance of this transaction for the market, and expressed his satisfaction at Calyon being appointed sole arranger for this extremely prestigious financing. 'Calyon is fully committed to the development of the Islamic market and we have brought together professionals from within the bank with a wide range of expertise in various disciplines to ensure the success of this deal. Bahrain is leading the way in developing Islamic banking and this transaction underlines the commitment of the authorities to provide an environment conducive to the growth of this important market' said Mr. Eedle.
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The Sukuk investors then have a proportionate beneficial ownership in these assets. Investors typically take on the credit risk of the issuer rather than real asset risk on the assets owned by the SPV.
Sukuks can be listed and rated, though this is not necessary, depending on the target investor market. Sukuks are typically issued by corporate issuers, and some Financial Institutions, and also by Governments (Bahrain, Malaysia, Pakistan).
(Islamic bond) for the Ministry of Finance of Bahrain through the Central Bank of Bahrain. Calyon was appointed sole arranger and underwriter on the transaction which attracted firm interest at 2.5 times the target issue amount. This was the first Sukuk issue from the Government of Bahrain since 2004 and represents an important new benchmark issue from a prime name in this rapidly growing market. The Kingdom of Bahrain remains at the heart of the Islamic banking industry and this issue exemplifies the commitment to the development of this market. The issue carries an A rating from S&P and Fitch. The transaction structure and documentation was reviewed and approved by a board of eminent ShariaIslamic law as revealed in the Quran and through the example of Prophet Muhammad.
A Sharia compliant product meets the requirements of Islamic law.
Sharia Board is the committee of Islamic scholars available to an Islamic financial institution for guidance and supervision in the development of Sharia compliant products. scholars. Simon Eedle, Head of Islamic Banking at Calyon, emphasized the importance of this transaction for the market, and expressed his satisfaction at Calyon being appointed sole arranger for this extremely prestigious financing. 'Calyon is fully committed to the development of the Islamic market and we have brought together professionals from within the bank with a wide range of expertise in various disciplines to ensure the success of this deal. Bahrain is leading the way in developing Islamic banking and this transaction underlines the commitment of the authorities to provide an environment conducive to the growth of this important market' said Mr. Eedle.