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International law firm Stephenson Harwood has advised on the first Shari’ah compliant bond issued in connection with the French tax lease financing of an LNG carrier.
The French company leasing the vessel under KEXIM-backed French tax lease finance arrangements issued sukuk Notes to an aggregate principal amount of $25 million. These Notes were subscribed by a Kuwaiti bank subject to Shari’ah principles. The issuer then applied the sums payable by the Note purchasers pursuant to a Murabaha Agreement, to finance part of the purchase price of the vessel, which is being built at a Korean shipyard.
The Stephenson Harwood team advised KEXIM and the French tax lease lenders on the bond issuance and says it marks the first instance of an Islamic finance instrument being used in conjunction with a French tax lease financing agreement.
“As the first financing of its kind, this project required an innovative approach to ensure the success of the transaction,” commented partner Alain Gautron, who led the Stephenson Harwood team. “We are seeing increased demand for Shari’ah compliant financing structures with a number of similar transactions forthcoming and are well placed to advise our clients looking to explore these opportunities.”
Stephenson Harwood, an international law firm with over 1,300 people worldwide, is headquartered in London, with eight offices across the Middle East, Asia, and Europe.
