Allen & Overy advised the Islamic Liquidity Management Corporation (IILM), an international institution which facilitates cross-border Shari'a-compliant liquidity management, on its first sukuk programme, worth USD2 billion.
The IILM was founded in 2010 to remove the obstacle to the growth of Islamic finance: a lack of highly rated, short-term financial instruments that financial institutions could trade and hold to manage their short-term funds. The establishment of this programme is the result of a unique collaboration between multiple regulatory authorities and multilateral development banks. The programme is backed by sovereign, sovereign-linked and supranational sukuk assets. It is rated by Standard & Poor’s.

The issuer of this sukuk programme is a Luxembourg incorporated securitisation vehicle and Allen & Overy advised on the establishment of an investment and financing platform based in Luxembourg. The first issuance of sukuk under the programme is expected to take place in the second quarter of 2013. This issuance will complement the currently available long-term and medium-term sukuk in the market.

"Designing this innovative liquidity instrument for IILM was a challenging task that required the reconciliation of strict Shari'a principles with Luxembourgish civil law. We are very pleased to have structured a bespoke product, driven by our client's needs, that has met the IILM's expectations", commented Frank Mausen.

The Allen & Overy team was led by Luxembourg-based capital markets partner Frank Mausen assisted by associate Evelina Palgan. Partner Patrick Mischo provided tax advice.

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