Islamic financing has taken another step towards the mainstream as a Turkish bank issues its first ever sukuk.
The US$100mn transaction, which is also the first bank sukuk originating from Europe, was issued by Kuveyt Türk through a Cayman Islands-based special purpose vehicle called KT Turkey Sukuk.
The portfolio of underlying investments has been carefully tailored to ensure that payments to sukuk holders will be shariah-compliant.
The issuance was advised by legal firm Norton Rose.
Neil Miller, global head of Islamic finance at the law firm’s Middle East offices, remarks: “We are delighted to assist our client on the first ever sukuk from Turkey. This is another significant step towards growing Islamic finance in Europe. The sukuk by Kuveyt Türk further demonstrates continuing interest and appetite for Islamic finance within key emerging economies.”
The law firm hopes that the landmark transaction will generate interest within the wider Turkish corporate community to consider sukuk issuances to raise capital.
“It [also] highlights the fact that Turkish legislation is conductive to certain, but very limited, Islamic finance structures and can facilitate the issuance of sukuks by Turkish entities,” concludes Rizwan Kanji, senior debt capital markets lawyer at Norton Rose.
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