Kuala Lumpur: International law firm Clifford Chance advised the joint lead managers, HSBC, CIMB Investment Bank Berhad, and Standard Chartered Bank, as joint lead managers, as to matters of English law and US federal securities laws in relation to on the $1.5 billion dual tranche sukuk issuance by the Government of Malaysia.
The sukuk is the first in the Islamic finance market to use transportation rights as part of the pool of underlying assets which also include ijara assets and a commodity murabaha. In addition, the sukuk is also believed to be the first time that the new IMF-recommended ICMA sovereign collective action clauses have been used for a sovereign sukuk issuance (and modified to take into account the unique elements of a sukuk).
The Government of Malaysia attracted orders of over US$9 billion from Asia, Europe, the Middle East and the United States, making it one of the most prominent sukuk issuances in recent times in Asia. The Reg S/144A sukuk was split into a US$1 billion 10-year tranche and US$500 million 30-year offering. The last sukuk issued by the Government of Malaysia was in 2011, on which Clifford Chance also advised.
The strong interest in the sukuk paves the way for other sovereign and corporate issuers in the region, particularly in Malaysia and Indonesia, to bring similarly structured products to the global Islamic finance market.
This is yet another highly innovative and market-leading Islamic financing undertaken by Clifford Chance in Asia Pacific. The team recently worked on the award-winning EXIM and Axiata sukuk programmes, the US$2.5 billion Cagamas sukuk and conventional programme, Garuda Indonesia’s US$400 million financing and on the first ever cross-border Islamic financing in Myanmar. The transaction also demonstrated the breadth of Clifford Chance’s specialist regional and product-specific knowledge, with the team comprising Dubai-based Islamic finance experts with U.S. securities law capability and debt capital markets execution being led out of Singapore.
“Clifford Chance is delighted to have advised on yet another ground-breaking Islamic finance deal in Asia Pacific. The high demand for the Government of Malaysia sukuk demonstrates the continuing growing appeal of Asia as an Islamic finance centre,” Global Head of Islamic Finance, Qudeer Latif said.