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With 2023 now firmly behind us, Walkers' Dubai based capital markets team discuss the year's key transactions and the upcoming trend expectations for 2024.
Cayman, DIFC and ADGM
Walkers has developed a leading practice as offshore counsel across a broad range of Islamic Finance products including in the field of Sukuk, Shari'ah-compliant bonds, as a means of accessing capital while still adhering to Islamic religious principles. The Cayman Islands' strong reputation in global finance has led to the Cayman Islands having become the preferred offshore jurisdiction for domiciling the issuer vehicles.
However, with a growing interest from GCC based clients, Walkers also assists in relation to the establishment of vehicles in the ADGM (Abu Dhabi Global Market) and the DIFC (Dubai International Financial Centre) for structured finance transactions.
Although Cayman remains the domicile of choice for issuer vehicles in 2023, we've seen an increasing number of DIFC domiciled issuer entities utilised in the region.
Notable 2023 Transactions
Walkers' most notable 2023 capital markets transactions include:
- US$5bn programme established by e& Group Sukuk Limited (e& Group)
- US$2bn programme established by Saudi Electricity Sukuk Programme Company (Saudi Electricity Co.)
- US$3bn issued under a programme established by GACI First Investment Company (The Public Investment Fund)
- US$2bn programme established by Kuwait Projects Company Sukuk Limited (Kuwait Projects Company)
- US$600m issued by Air Lease Corporation Sukuk Limited (Air Lease Corporation)
- US$350m issued by Arada Sukuk Limited (Arada Developments)
- US$100m issued by SC Sukuk 1 Limited (SHUAA Capital)
- US$250m issued by ENOC Sukuk Limited (Emirates National Oil Company Limited (ENOC))
- US$300m issued by Sobha Sukuk Limited (Sobha Realty)
- US$350m issued by Arada Sukuk Limited (Arada)
- US$400m issued by Alpha Star Holding VII Limited (DAMAC)
- US$43m issued by RSS Sukuk Company (Sancta Capital)
- US$30m issued by Moove Sukuk Company (Moove)
Notably, Walkers advised on four MENA deals recognised under five winning categories at the 2023 Bonds, Loans and Sukuk awards, held in Dubai, including: Global Corporate Sukuk Deal of the Year; Ground-breaking Deal of the Year; Mid-Cap Debt Deal of the Year; and Aircraft Finance Deal of the Year.
Outlook into 2024
During the recent COP28, The Islamic Development Bank announced a collaboration with International Capital Market Association and the London Stock Exchange Group for Developing Guidance for Practitioners on Green Sukuk. This, together with the increasing growth opportunities in the Environmental, Social and Governance (ESG) bond market, demonstrates a clear commitment by GCC-based financial institutions to taking the lead in ESG sukuk issuances, comprising green and sustainability-linked sukuk.
As many Islamic finance countries develop and implement green and sustainable strategies and issuers look to broaden the investor base and include funds aligned with sustainability themes, higher volumes of green and sustainability Sukuk are expected.
Lastly, the trend in utilising Cayman issuer vehicles, the growing interest in DIFC domiciled structures and the uptick in ethical and sustainable investments where Islamic finance and shariah compliance bond products are very well placed, in combination with last year's performance and a strong pipeline of Sukuk transactions in the GCC region, provides a cautiously optimistic outlook into the 2024 Islamic capital markets space.
Walkers Services
Walkers provides fully-integrated legal and fiduciary services to our international client base, effectively offering a “one stop shop” for our clients and a wide range of options for structuring financial services transactions. Supplemental to Cayman law advice, Walkers' offering also includes incorporation services (assisting with forming Cayman Islands, ADGM and DIFC issuers as orphan, bankruptcy remote vehicles), as well as administrative, registered office, directorship and share trustee services. Additionally Walkers' global offering provides various ancillary services such as English service of process agent services and Irish listing services.
Our fiduciary services include:
- Providing experienced and technically sophisticated independent directors to the structured finance SPVs
- Acting as share trustee on “orphan” and off-balance sheet Structures
- Providing corporate administration, record-keeping and registered office services
- Ensuring compliance with reporting and registration obligations affecting structured finance SPVs
- Ensuring entities are compliant with governmental and regulatory reporting requirements, including AEOI, AML, Beneficial Ownership and Economic Substance
Walkers also offers Irish listing agent services through our Dublin office with whom the Dubai office works closely. We are one of the leading listing agents in Ireland possessing significant experience across a wide variety of investment funds and debt capital markets transactions including the listing of Sukuk, MTN programmes, sovereign debt, plain vanilla debt, high yield and Eurobond listings.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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