Linklaters has advised the Managers on the issue by the Luxembourg Government of a €200 million sukuk (Islamic bond). The transaction represents the first euro-denominated non-Islamic sovereign sukuk, which follows the UK Government’s issuance of the first ever sukuk outside the Muslim world, which Linklaters advised the UK government on in July 2014.

BNP Paribas and HSBC acted as joint lead managers and Banque Internationale à Luxembourg S.A. and QInvest LLC acted as co-managers on the transaction.

Patrick Geortay, Head of the Luxembourg Capital Markets and Banking Practice, said:

“This transaction, which involved complex Sharia, but also constitutional, property and trust issues, is another innovative structure for the Luxembourg financial centre.  It is a strong message from the Luxembourg Government on the positioning of Luxembourg as a jurisdiction of choice for Islamic finance and sophisticated international investment and finance products.”

Jonathan Fried, Head of the Dubai Capital Markets Practice, said:

“Following on from the UK government’s recent sukuk issue, this is yet another important transaction in the international sovereign sukuk markets, and provides further evidence of the reach of this versatile capital markets product. The internationalisation of sukuk is something we expect to continue to see in the years ahead.”

The sukuk carries a profit rate of 0.436 per cent. and has a tenor of five years. The sukuk was issued on the basis of a sukuk al-ijara structure, over land and buildings used for civil and government administrative purposes and has been listed on the Luxembourg Stock Exchange and admitted to trading on its Euro MTF market.

The Linklaters team was led by Capital Markets partners Jonathan Fried (Dubai), Patrick Geortay, Nicki Kayser (both Luxembourg) and Richard O’Callaghan (London). They were supported by capital markets associates Leah Weldon and Cathrine Foldberg Møller. Real Estate advice was provided by Olivier Reisch and BNP Paribas Trust Corporation UK Limited, acting as Delegate, was advised by Capital Markets partner Jasper Evans, managing associate Eliot Solarz and associate Charlotte Forbes.