Germany’s FWU Group issues largest Sukuk out of Europe

Germany’s FWU Group issues largest Sukuk out of Europe

Daily Cover

GERMANY: Takaful provider FWU Group has issued a US$55 million Sukuk Ijarah in a deal touted as the largest Islamic bond sale out of Europe and the first ever by a German corporate. The notes were structured similarly to the German state of Saxony-Anhalt’s quasi-sovereign EUR100 million (US$130.25 million) Sukuk issued in 2005; and were taken up by a number of GCC-based investors, primarily from within the Takaful sector. The Sukuk was backed by assets including intellectual property rights. Dr Manfred J Dirrheimer, the chairman of FWU Group, said that the financing will expand the group’s global network while broadening its Takaful offering; and provided an investment product for Takaful operators “often starved of such products.” Local consultancy firm RölfsPartner acted as the financial and tax advisor for the transaction, while Vinson & Elkins was the legal advisor. Loyens & Loeff advised on Luxembourg law and international tax structuring for the issuing special purpose vehicle (SPV), which was incorporated using a Dutch Stichting structure. Maples FS and ATC Capital Markets provided corporate services to the SPV and the Dutch Stichting, while Ernst & Young provided specialist intellectual property advice for the Sukuk’s underlying assets. While Germany has traditionally lagged behind its European counterparts Ireland, Luxembourg and the UK in supporting Islamic finance, FWU Group’s Sukuk and other recent developments, such as Kuveyt Türk Katilim Bankasi’s plans to launch Germany’s first fully-fledged Islamic bank, could signal that the tide might just be turning for the industry in the country.