RAKIA Sukuk (continued...) - Islamic Finance News

Deals of the Year 2007 Handbook
Tamweel US$210 million Shariah
Compliant Securitization
In July 2007, Morgan Stanley successfully priced the Tamweel
US$210 million Shariah compliant securitization amid
volatile and choppy market conditions.
The Tamweel transaction represents the fi rst internationally
rated, Shariah compliant, true sale residential asset backed
securitization from the Middle East. It is also the fi rst deal to
incorporate multiple tranches within a Shariah compliant
structure.
DEAL STRUCTURE
The asset portfolio consisted of residential property leases relating
to properties in Dubai structured on a lease-to-buy basis.
As originator, Tamweel sold legal title to its Ijarah assets to
a special purpose vehicle, or SPV (Tamweel Properties),
which in turn assigned its rights to the issuer SPV, Tamweel
Residential ABS. Tamweel continues to act as originator
and servicer of the Ijarah assets.
Morgan Stanley acted as joint bookrunner for the transaction
in addition to providing a series of Shariah compliant
currency hedging solutions for the transaction, in order to
guarantee the current AED-USD peg rate.
SHARIAH COMPLIANT TRANCHING
Under the Shariah, the acquisition of properties and other
assets and rights can be made in tranches as contemplated
under the acquisition agreements with payment being
made after the acquisition.
The Shariah basis for payment on the notes being prioritized
was based on the consent of the noteholders such that:
(a) Noteholders of a class of Notes may agree to dispose
of their right to receive payments under the Notes
(including payments of principal which are derived
from the rental payments) as they wish;
(b) Noteholders of another class of Notes (being coinvestors)
may receive payments of a higher or lower
rate of variable return, as the case may be; and
(c) In the disposition of such rights to receive payments,
the Noteholders of one class of Notes may agree that
their rights to receive payments under the Notes and
the payments when made (but only such rights and
continued...
ZUL RAFIQUE & partners
2008 - Malaysian Law Firm of the Year (IFLR Asian Awards)
2007 - Malaysia Deal of the Year (Islamic Finance news Awards)
2006 - Malaysian Law Firm of the Year (IFLR Asian Awards)
2005 - Malaysian Law Firm of the Year (IFLR Asian Awards)
2005 - Malaysian Law Firm of the Year
(ALB - Inaugural SE Asia Deals of the Year)
2002 - Malaysian Law Firm of the Year (IFLR Asian Awards)
www.IslamicFinanceNews.com
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