Announcing the launch of this latest trade finance investment product, the Chief Executive of ABIB Mohammed Al Mutawae said that ABIB being a part of the Al Baraka Banking Group would continue to offer unique investment products such as Sukuk Al Wakala Trust Certificates for investors across the various geographic locations.
Through these certificates accredited Investors are being given the opportunity to invest in the issuance of Certificates by the Issuer.
“Up to $200 million of certificates are being offered under this issuance, subject to a minimum subscription of $100,000. T he proceeds from the Certificates will be used to invest in a Shari’ah compliant trade finance arrangement or arrangements. This investment will be made through an agency arrangement whereby the Issuer (in its capacity as the principal, the “Muwakkil”) will enter into a wakala agreement with Al Baraka,” he explained.
“Under the Wakala Agreement, the Muwakkil agrees to contribute the nominal amount of the Certificates and the Wakeel agrees to invest the nominal amount on behalf of the Muwakkil for the purpose of a Shari’ah compliant trade finance arrangement or arrangements.
“Given the nature of the investments that will be made with the Certificate proceeds, the Certificates will not be tradable on any exchange in any part of the world.”
“Recourse of the Certificate holders will be limited to the Wakala Assets. The Muwakkil agrees to pay the Wakeel an amount equal to 2 per cent of the nominal amount of the certificates. The agency fee will be paid on the date the Certificates are issued. Following the Allotment Date, no further certificates under this issuance will be issued and no existing certificate holder under this issuance will be entitled to increase their holding of Certificates issued in this issuance. Any further issuances by the Issuer in the future will be constituted and governed by transaction documents separate to any of the transaction documents constituting and governing this issuance. Al Baraka will subscribe for a minimum of 10 per cent of the nominal amount of the issued Certificates. A Fatwa has been issued in respect of both the issue of the Certificates and the Wakala Agreement by the Shari’ah Board.”