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Monday, 30 July 2007

Dechert highlights Islamic finance skill with innovative sukuk scheme

Dechert has acted on a key Islamic finance deal, advising on the establishment and London Stock Exchange listing of a $1bn (£485.87m) sukuk certificate issuance programme. A team led by London-based finance partner Abradat Kamalpour advised Dresdner Kleinwort and HSBC Bank as co-arrangers, dealers and bookrunners on the establishment of the programme for Bahrain's Gulf Finance House. According to Kamalpour, the deal is significant because the programme allows for numerous sukuks (the equivalent of bonds) to be issued from the same platform. "When sukuks started they were done as one-off issues," he said. "Now a corporate can set up a programme under which it issues these bonds. "This is one of just a handful of such programmes - only the fourth in the world. Gulf Finance House now has a platform so it can issue bonds very quickly." Another unusual feature of the sukuk programme, according to Kamalpour, is that it is backed by shares as opposed to real estate, which is normally the case. "We came up with the structure working alongside the banks," he said. Dechert, which pitched for the role, won the instruction on the back of its reputation in the Islamic finance world. The firm advised on the first sharia-compliant private equity vehicle earlier this year. Dechert also advised HSBC Trustee as the administrator on the deal. Due to Chinese wall considerations, however, this was handled by counsel Andrew Wilson. Walkers acted for the Cayman Islands-based special purpose vehicle used to issue the programme, while Lovells acted for Gulf Finance House. - (The Lawyer, 30 July 07)

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