Allen & Overy has advised on the Republic of South Africa's inaugural sukuk issue, the first international sukuk issuance from Africa.

The sukuk was issued through ZAR Sovereign Capital Fund Proprietary Limited (acting as trustee of The RSA Sukuk No. 1 Trust) with an aggregate face amount of USD500 million, having a 5.75 year tenor and a fixed rate profit payment of 3.90 per cent. per annum.

The sukuk was offered within the U.S. to "qualified institutional buyers" and to non-U.S. persons in offshore transactions, in accordance with Rule 144A and Regulation S, respectively. In keeping with the Republic's existing conventional securities offerings under its SEC-registered shelf programme, the sukuk is listed on the Luxembourg Stock Exchange.

The Islamic structure underpinning the sukuk involved the sale and leaseback of certain infrastructure assets owned by the Republic, with such assets to be repurchased by the Republic upon the redemption of the sukuk.

Dubai-based capital markets partner and head of the firm's global Islamic finance practice, Anzal Mohammed commented: "This is a significant transaction for the Republic of South Africa, the development of Islamic finance in Africa and the international Islamic capital markets and we are delighted to have advised the Republic on this ground-breaking sukuk issuance. With the exception only of the United Kingdom, Turkey and the Emirate of Sharjah (UAE) sukuk issuances, the firm has advised on every debut international sovereign sukuk issuance to date globally and this transaction builds on our recent role in advising on the Hong Kong sovereign sukuk. These transactions continue to demonstrate the strength of Allen & Overy's global sovereign capital markets practice".

London-based US capital markets partner Sach Davé also remarked: "We are very proud to have been given the opportunity to build on our existing relationship as adviser to the Republic on their SEC-shelf registration. With this transaction, the Republic joins an elite band of sovereigns who have chosen to pursue an Islamic securities offering, and we look forward to seeing other sovereigns in Africa come to market in the future".

The Allen & Overy team advising the Republic of South Africa was led by capital markets partners Anzal Mohammed (Dubai) and Sach Davé (London), with assistance from Mark Jones (senior associate, Dubai), Kalliope Kefallinos (associate, London) and James Osun-Sanmi (associate, Dubai).