V12i27: Crossing borders: Export financing creates new paths

Rapids • Deals • News • Takaful • Asset Management • Ratings • Moves
8th July 2015 (Volume 12 Issue 27)
Funding the future Islamic finance is always coming up with new innovations, and this week we look at some of the latest excitement in the industry with the recent Emirates Airline export credit agency-backed Sukuk. A groundbreaking transaction, the deal not only has resonance for aviation finance but for export deals and the wider Islamic debt capital markets across the world. Our cover story this week explores the impact of export finance innovation across the industry, speaking to key players and analyzing core features of the deal. The future looks bright indeed for this inclusive and encompassing financing trend. Our IFN reports this week look at retail funds, Islamic pension funds and Toyota Capital’s Sukuk offering while our IFN Correspondents look at Oman, South Africa, Afghanistan and real estate. Our features cover Lebanon from BSA Advocates & Legal Consultants and Shariah governance from the Islamic Finance Council of Ireland, while our special reports look at the banking industry, commodity platforms and lending disclosures. As always, we wish you a productive week and Ramadan Kareem during this summer rest period. Cover Story Crossing borders: Export financing creates new paths In March this year Emirates Airline closed a US$913 million Sukuk issuance, in the first-ever deal backed by the UK government through UK Export Finance (UKEF). But the transaction was groundbreaking in more ways than one — and has carved a path upon which traffic is already increasing. As the dust settles on the deal, LAUREN MCAUGHTRY looks back at its unique features, and forward towards its ultimate impact on the industry.    IFN Reports • Toyota Capital taps Islamic markets for the second time • Islamic finance finds its way in Malaysian retirement funds • Retail funds look to developed markets for returns • Company Focus: Aafaq Islamic Finance • Dutch acquisition for Islamic real estate specialist • Sovereign Sukuk: A week of broadening the horizon of regular issuances • OAPEC entity to attract wider global investor base with Sukuk • IFN Weekly Poll: Which segment of the industry is the main contributor to the increase in global Islamic finance assets? • Malaysia’s Islamic finance market — looking rosy under dark clouds • Basel III Tier 1 Sukuk regaining momentum IFN Country Correspondents • Omani Islamic financial sector developing fast • South Africa looking to tap global markets once again • Public comments and expert views on the Islamic banking law in Afghanistan IFN Sector Correspondent • Tired of London? IFN Country Analysis • Bahrain: Coming back strong IFN Sector Analysis • Shariah governance and scholars in Islamic finance Case Study Khazanah Nasional: Creating a new asset class Malaysia’s strategic investment fund, Khazanah Nasional, on the 18th June successfully issued the first tranche of its responsible investment Sukuk program (First Sukuk Ihsan). At a periodic distribution rate of 4.3% per annum, the Sukuk incorporates a unique structure whereby the repayment is dependent on the eligible socially responsible investment (SRI) project’s ability to meet identified key performance indicators (KPIs). Speaking to Mohd Izani Ghani, the executive director and chief financial officer of the sovereign wealth fund, NABILAH ANNUAR has the exclusive. Special Reports Criteria in choosing a commodity platform Commodity Murabahah/Musawwamah (CM), which is guided by the concept of Tawarruq, may be considered as the most common Shariah contract used by Islamic financial institutions (IFIs). Islamic banks have a real agenda for supporting business Islamic banking products have a natural and genuine relationship with the business of their clients compared to the shallow relationship conventional banking products have with the business of their clients. ISHRAT HUSSAIN explores. Here’s what you can expect from the Truth in Lending Act disclosure changes If you are getting nervous about the proposed Truth in Lending Act (TILA) disclosure statement changes that are on the way, you needn’t be. It is an ongoing process and it would seem that as soon as you get a good handle on the way the requirements are currently working with TILA, the government makes even more tweaks — for better or worse is really anyone’s guess. SHOEB M SHARIEFF writes. Features Water Supply Augmentation Project/Electronic Trading System In this article, JOHNNY EL HACHEM provides an overview of two significant projects in Lebanon:  The Water Supply Augmentation Project and the Electronic Trading System. Water Supply Augmentation Project For years, Lebanon struggled with water shortages in the summer and fall. It only stores 6% of its water resources, compared to the regional average of 85%. Islamic finance: Shariah governance Governance of Shariah compliant financial institutions and Shariah governance generally is at a pivotal point. To date, AAOIFI and IFSB standards have formed the benchmark for institutions and the industry. However, adherence to such standards is voluntary and, as has been identified in a recent IMF report, adherence has been haphazard and non-uniform across various jurisdictions. SIMON O’NEILL puts Islamic finance governance under the spotlight.  CONTACTS Editorial: Sasikala Thiagaraja Direct Line: +603 2163 7800 ext 34 Finance: Faizah Hassan Direct Line: +603 2162 7800 ext 26 Sales: Dubai: Geraldine Chan Direct Line: +971 4 427 3628 Kuala Lumpur: Steve Stubbs Direct Line: +603 2162 7800 ext 55 Subscriptions: Dubai: Geraldine Chan Direct Line: +971 4 427 3628 Kuala Lumpur: Siti Amilia Amir Amzah Direct Line: +603 2162 7800 ext 27