With over 212 unique submissions, the 2007 Deals of the Year awards were one of our greatest challenges ever to review and arrive at our final selections. The fourfold growth in submissions reflected the dramatic increase in the volume of new deals.
Many of these transactions reflect the depth of the players from the regional institutions in Malaysia and the GCC, as well as the importance of the global banks. Innovation was a hallmark of the transactions, with many bankers and their clients testing new frontiers.
Deal of the Year:
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DIFC Investments LLC |
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Size:
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AED7.5 billion (US$2 billion)
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Arrangers:
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Barclays Capital, Deutsche Bank, Dubai Islamic Bank, Lehman Brothers
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Lawyers:
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Allen & Overy, Clifford Chance, Lovells, Maples and Calder
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Rating:
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A1/A+ (S&P)
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Date:
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20th November 2007
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Shariah Adviser:
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Dubai Islamic Bank Shariah Board
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These Sukuk al Mudarabah issued by the Dubai International Financial Center (DIFC) through a DIFC-registered special purpose vehicle represent both the capability of the DIFC to serve the market, as well as funding the DIFC in its investment strategy. It is a case of proof of concept in that the DIFC is able to demonstrate how its law and vehicles can serve a global market. The DIFC’s general funding needs include expanding infrastructure for the DIFC in hard and soft assets, acquisitions and all other activities that support the growth and success of the DIFC as a whole. This in itself bodes well for the growth of the global Sukuk market. Indeed, the world bought into the story with 47% of the investors coming from Europe and 20% from Asia; 7% of the investors were themselves governments and central banks.
Best IPO:
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DP World |
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Size:
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US$1.5 billion
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Lead Arrangers:
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Deutsche Bank, Merrill Lynch International, Shuaa Capital, Millennium Finance Corporation
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Lawyers:
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Clifford Chance, Linklaters
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Rating:
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A+ (S&P)
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Date:
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June 2007
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Shariah Adviser:
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n/a
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This transaction opened on the 4th November 2007 and closed on the 15th (institutional closings the 20th), with an over-allotment option of US$700 million. The transaction fulfills the IPO promise to holders of the US$3.5 billion PCFC Development Sukuk Al Musharakah of 2006. The transaction is the largest ever and first retail offering on the DIFX.
Most Innovative:
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Mobily Project Financing |
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Size:
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US$2.85 billion
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Lead Arrangers:
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ABN Amro, Al Rajhi Bank, Banque Saudi Fransi, Calyon, National Bank of Abu Dhabi, The National Commercial Bank, Saudi Hollandi Bank, Samba Financial Group
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Lawyers:
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Al-Jadaan & Partners Law Firm, Baker & McKenzie, The Law Office of Mohammed Al-Sheikh, White & Case
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Rating:
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n/a
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Date Closed:
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March 2007
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Shariah Advisers:
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Dr El Gari, Dr Nazih Hammad and Sheikh Nizam Yaquobi
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In a year of significant innovation, we saw new structures from Malaysia; Red Sea Gateway, Egyptian Fertilizer Company acquisition and Tamweel PJSC, among others, all gave close competition to Mobily. In the end, it was the demonstration of the fungibility of air time, an intangible asset, and its use as the underlying asset for a proper Islamic sales transaction applying the Islamic rules of agency that won in this category. This transaction demonstrates that innovation does not require complication and paves the way for funding other high-technology and communications deals in the future.
Best Equity:
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Cherating Capital (Khazanah) |
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Size:
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US$850 million
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Lead Arrangers:
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Deutsche Bank
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Co-Arrangers:
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European Islamic Investment Bank, Mashreqbank | |
Lawyers:
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Adnan Sundra & Low, Clifford Chance Wong Private Limited, Kadir Andri & Partners, Linklaters Allen & Gledhill
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Rating:
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n/a
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Date:
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5th July 2007
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Shariah Adviser:
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CIMB Islamic Shariah Committee
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This transaction replicates the exchangeable structure first pioneered by Khazanah in 2006. In this case, the Sukuk holders will have the option to exchange their units for shares of PLUS Expressways at the maturity of the Sukuk. In addition to being the largest Malaysian equity-linked deal, this Dubai International Financial Exchange (DIFX)-listed transaction is the third-largest Asia-Pacific deal outside of Australia and Japan.
Best Cross-Border:
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Cherating Capital (Khazanah) |
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Size:
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US$850 million
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Lead Arrangers:
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Deutsche Bank
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Co-Arrangers:
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European Islamic Investment Bank, Mashreqbank | |
Lawyers:
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Adnan Sundra & Low, Clifford Chance Wong Private Limited, Kadir Andri & Partners, Linklaters Allen & Gledhill
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Rating:
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n/a
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Date:
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5th July 2007
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Shariah Adviser:
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CIMB Islamic Shariah Committee
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Perhaps no sponsor has been as successful in attracting capital on a global basis as Khazanah. With the Cherating exchangeable deal, Khazanah continues this trend and draws capital from Japan to North America, and critically strengthens bonds with the GCC. The transaction is listed on the Hong Kong Exchange, the Dubai International Financial Exchange and Malaysia’s Labuan International Financial Exchange.
Best Structured Finance:
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Tamweel Residential ABS CI (1) Ltd |
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Size:
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US$210 million
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Lead Arrangers:
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Morgan Stanley, Standard Chartered
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Lawyers:
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Allen & Overy, DentonWildeSapte (Dentons)
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Rating:
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Class A Notes – Aa2 (Moody’s)/AA (Fitch), Class B Notes – Baa1 (Moody’s)/BBB+ (Fitch), Class C Notes – Ba3 (Moody’s)/BB- (Fitch), Class D Notes not rated
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Date:
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25th July 2007
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Shariah Adviser:
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Dr Hassan Hussain
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At last, this deal represents the first true securitization of Islamic mortgage alternatives without excessive cash collateralization or recourse to the originator. The transaction creates a clever tiering of the Sukuk into unique classes in a Shariah compliant manner, and is the first UAE-rated Islamic mortgage alternative instrument.
Best Ijarah:
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Red Sea Gateway Terminal Limited |
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Size:
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SAR 1.7 billion (US$453.93 million)
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Lead Arrangers:
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Al Rajhi KSA, Saudi Fransi Bank
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Lawyers:
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Allen & Overy, Linklaters
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Rating:
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n/a
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Date:
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6th December 2007
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Shariah Advisers:
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Al Rajhi Bank Shariah Board
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Al Rajhi Bank underwrote SAR1.7 billion (US$507.35 million) of the SAR1.9 billion (US$453.93 million) required to execute this major project financing. This project applied the unique structure developed as Al Rajhi’s approach to forward leasing, using Wakalah with the forward lease. In the deal, the lease has a 16-year tenor, and the client is the agent of the banks during the construction phase to build the asset. The transaction provides a new look at how to execute forward leases for construction, and provides a viable alternative to Istisna in structuring long-term project financings. Competition was strong in this segment, with innovative presentations from Qatar, the UAE, Malaysia, the US and Europe.
Best Mudarabah:
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Aldar exchangeable Sukuk |
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Size:
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US$2.53 billion
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Lead Arrangers:
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Barclays Capital, Credit Suisse, National Bank of Abu Dhabi
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Lawyers:
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Bedell Cristin Jersey Partnership, Clifford Chance, DentonWildeSapte, Simmons & Simmons
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Rating:
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Not rated
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Date:
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8th March 2007
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Shariah Advisers:
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Sheikh Nizam Yaquobi and Dr Abdul Sattar Abu Guddah
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The Mudarabah space was very active last year and Aldar won in a tough competition that included DP World, Cornerside Investment (KFH Malaysia), Jebel Ali Free Zone and Gulf General Investment. This proved to be the largest exchangeable deal raising capital for the lesser-known Aldar Properties. The deal entrusts Aldar, Abu Dhabi’s largest property developer, to act as mudarib for investors in the Abu Dhabi property sector. The transaction proved popular in the international markets, with 80% sold in the international markets and penetration into the US institutional market.
Best Musharakah:
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KL Sentral Sukuk Musharakah |
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Size:
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RM720 million (US$218.9 million)
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Lead Arrangers:
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HSBC Bank Malaysia, Kuwait Finance House (Malaysia)
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Lawyers:
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Newfields Advisors, Zaid Ibrahim & Co
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Rating:
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AA2 (Rating Agency Malaysia)
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Date:
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29th March 2007
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Shariah Advisers:
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Kuwait Finance House (Malaysia) Shariah Board
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This structure refinances KL Sentral’s prior Bai Bithaman Ajil debt. The proceeds are meant to transform 72 acres of prime land in Kuala Lumpur. The RM720 million (US$218.9 million) transaction includes a put option to the sponsor in order to enhance the credit of, and thereby improve, the pricing compared to the prior debt structure. The transaction leads the growing trend that expects Malaysian issues to seek globally acceptable Sukuk structures.
Best Sovereign:
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Ras Al Khaimah Investment Authority |
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Size:
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US$325 million
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Lead Arrangers:
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Credit Suisse, HSBC, National Bank of Dubai
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Lawyers:
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Allen & Overy, Lovells, Maples and Calder
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Rating:
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n/a
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Date:
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5th December 2007
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Shariah Advisers:
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n/a
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This is the initial benchmark issue for the UAE constituent emirate of Ras Al Khaimah. The transaction reflects the full faith and credit of the emirate’s investment authority and enjoys an irrevocable and unconditional guarantee from the government. The proceeds will be applied to the development of real estate assets.
Best Sukuk:
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Jebel Ali Free Zone Sukuk |
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Size:
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AED7.5 billion (US$2 billion)
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Lead Arrangers:
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Barclays Capital, Deutsche Bank, Dubai Islamic Bank, Lehman Brothers
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Lawyers:
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Clifford Chance, Maples and Calder, Allen & Overy, Lovells
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Rating:
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A1 (Moody’s)/A+ (S&P)
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Date:
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27th November 2007
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Shariah Advisers:
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Dubai Islamic Bank Shariah Board
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This is the initial benchmark issue for the UAE constituent emirate of Ras Al Khaimah. The transaction reflects the full faith and credit of the emirate’s investment authority and enjoys an irrevocable and unconditional guarantee from the government. The proceeds will be applied to the development of real estate assets.