Lovells advises on supranational Sukuk for IFC, World Bank Group

The IFC Hilal Sukuk is a dollar-denominated $100m non-amortizing issue with a five-year maturity. Given the quality of IFC's Aaa credit, and IFC's credentials as a member of the World Bank Group, it is a landmark transaction which will help develop the nascent Sukuk market.

"The Sukuk is an innovative way for IFC to create opportunities for Islamic investors who want to make a positive social impact," said Lars Thunell, IFC Executive Vice President and CEO. "It also supports the World Bank Group's goals to integrate the Arab world into the global economy and offer greater opportunities for its people."

The joint lead managers for IFC's inaugural GCC Sukuk were HSBC Amanah, Dubai Islamic Bank, Kuwait Finance House Bahrain, and Liquidity Management House.

"We are grateful to the Shariah scholars, our partners at the Dubai and Bahrain exchanges, and the syndicate for guiding us through this complex process, and hope that the model will facilitate the process for other issuers to enter the Sukuk market," said Nina Shapiro, IFC Vice President for Finance and Treasurer.

The Sukuk global asset class has a market value of over $200bn. IFC is the first non-Islamic financial institution to issue a Sukuk for term funding in the GCC. The IFC Hilal Sukuk has been rated Aaa by Moody's.

IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. It fosters sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Its new investments totaled $14.5bn in fiscal 2009, helping channel capital into developing countries during the financial crisis.

The Lovells team was led by Lovells' Global Head of Islamic Finance, Rahail Ali, who was assisted by of counsel Imran Mufti, senior associate Daniel Rankin, associates Roger Fankhauser and Sema Kandemir out of the Dubai office. Partner Kit Johnson and associates Stephen Bate and Jill Barraclough in Lovells' London office also advised Citi in its roles as agents and as delegate trustee for the Sukuk.

Speaking today Rahail Ali said, "The IFC Hilal Sukuk is one of those deals that comes along once in a lifetime - working on a Sukuk for a member of the World Bank Group, coupled with IFC's development mandate, and the resounding success of the issue, means that all parties concerned with the Sukuk can be proud of this transaction and be assured that it will have its own unique place when the history of Sukuk is written. We are really pleased for IFC."