HSBC Amanah, the global Islamic financial services division of the HSBC Group, has recently concluded several transactions that contributed US$1.45 billion into the GCC region. HSBC Amanah acted as Mandated Lead Arranger on the US$850 million 5-year revolving Murabaha for Kuwait Finance House (A-/A2) and as Financial Adviser to Saudi Aramco and Sumitomo Chemical on the US$ 600 million Islamic facility for the Rabigh Refinery and Petrochemical Project.
The Kuwait Finance House deal was launched at US$500 million, oversubscribed to US$942 million and closed at US$850 million, of which more than three quarters was placed outside the Middle East. The deal was very competitively priced, reflecting the strong position of both Kuwait Finance House and the Mandated Lead Arrangers at a margin of 32 basis points over 6-month US$ LIBOR.
HSBC Amanah also acted as Islamic Financial Adviser to Saudi Aramco and Sumitomo Chemical on the US$ 600 million Islamic facility for the Rabigh Refinery and Petrochemical Project to. The Islamic facility is the largest in a project financing to date and is based upon the procurement of a number of core project assets and an Islamic lease facility of those assets to the project company. The advisory assignment involved bringing together a diverse group of financiers to a mutually acceptable positionform a syndicate for the facility.
The project entailed the development of an integrated refinery and petrochemicals complex at the site of the existing Rabigh Rrefinery with an estimated capital cost of US$ 9.8 billion. On completion of the project, the Rabigh complex is expected to be one of the world's largest export-oriented refinery and petrochemical complexes.
“Project finance in the Middle East is growing at a great pace which is an indication of the booming local economies. We find that a growing number a significant portion of the related funding requirements are being structured according to Shariah,” said Asad Zafar, Managing Director of the Asset Finance Advisory Group, HSBC Amanah.
“The Murabaha facility for Kuwait Finance House has consolidated HSBC’s position as the number one lead manager of FI deals in the GCC region and reaffirmed HSBC Amanah’s leading position in Islamic structured transactions. The Rabigh Refinery and Petrochemical deal demonstrates our ability to advise leading companies on Islamic financing for complex multi-source financing,” he added.
On the Sukuk front, HSBC Amanah acted as Advisers to the Government of Brunei on the establishment of its Brunei Dollar Short Term Sukuk Al-Ijara Programme. Brunei is the first sovereign in the world to develop its capital market in a Shariah compliant manner without first having established a conventional capital market.
The programme, denominated in Brunei dollars, involves the issue of short-term “Sukuk al-Ijara” which are effectively asset-backed lease securities. It is also the first Ijara-based Islamic money market programme ever implemented.
“The establishment of the Programme is a landmark in the development of Islamic finance in Brunei and for the Islamic finance industry and allowings for the theoretical establishmentcreation of a theoreticaln Islamic profit rate curve. It is the first time a government has issued short dated fully tradable Sukuk under a programme which are in line with global Shariah standards,” explained Zafar.
The Asset Finance Advisory Group (AFAG) is the primary vehicle for HSBC Amanah’s institutional business, and is headquartedbased in Dubai, with representation in other jurisdictions. It originates, structures and executes Shariah compliant transactions.
