Kuwait Finance House (KFH), The world’s leading Islamic bank, announced that it won Best Deal in 2013 award in Europe by The Banker, after the bank managed to arrange a sovereign Sukuk deal for the Turkish government worth USD 1.5 billion. This highlights the bank’s pivotal role in the global Sukuk market, in addition to its ability to arrange and finance all forms of Sukuk deals for companies or governments.
This deal that is unprecedented in Turkey has allowed for further Sukuk issuances in TL and USD, and encouraged numerous Turkish companies to search for the Sukuk product, and consider it an innovated financing instrument that meets the requirements of companies that seek to expand and develop their businesses; especially that Sukuk are the Islamic alternative to bonds, and do not burden the budget of the issuers.
It is worth noting that through its fully owned subsidiary, Liquidity Management House (LMH), KFH managed to arrange the issuance of Ijarah Sukuk for the Turkish treasury worth USD 1.5 billion over a five and half years. The deal is in conjunction with Citigroup and HSBC. The deal was highly demanded and 250 investors submitted requests to participate with a value of USD 7.1 billion, which covers the value of issuing the Sukuk by five times.
Moreover, this issuance is considered to be the result of collaboration among numerous authorities with KFH, especially the Turksih treasury that worked tirelessly to set the legislative and regulatory frames to issue the Sukuk, if the Turkish government wishes to make further issuances. The issuance also reflects the Sukuk market, where the Middle East possessed 58% of issued Sukuk, followed by Europe 13%, Asia 12%, Turkey 9%, and the United States 8%.
According to distributions based on types of investors, banks possessed 59%, asset managers 22%, international institutions and central banks 10%, and wealth managers 5%.