The Kingdom of Installment Company (KIC) Sukuk transaction is considered as the first true-sale securitization in the Gulf Cooperation Council (GCC). It is backed by US$23 million of Ijarah and Istisna contracts, providing an off-balance sheet alternative source of funding to KIC as well as a Shariah compliant, fixed-income investment product (akin to a mortgage-backed security) to GCC and international capital markets.
The Law Office of Mohammed Al-Sheikh, in association with White & Case, acted as counsel to Unicorn Investment Bank and Standard Bank Group in connection with a landmark securitization transaction on behalf of KIC in Saudi Arabia. Unicorn Investment Bank was lead manager and Shariah advisor, and was also joint book runner in conjunction with Standard Bank Group.
Mohammed Al-Sheikh, lead partner advising on the deal and co-head of White & Case’s Islamic Finance Unit explained that the securitization had broken new ground from a legal and Shariah structuring perspective and paves the way for future Sukuk transactions in Saudi Arabia.