Asset-backed securities represent an ideal class of securities for Islamic investors, so long as the underlying assets are themselves acceptable and the cash flows coming from them are generated and used in a Shari’a-compliant manner.
Islamic securitisation structures are made possible with the issue of Sukuk on the basis of a Shari’a-compliant contract (for example Ijarah, Istisna, or Mudaraba).
The award-winning Caravan I transaction was a development of several years’ experience in the structuring of conventional securitisation vehicles, resulting in a ground-breaking Sukuk issue to investors in GCC countries. The transaction was sourced by Bemo Securitisation, and Volaw played a major role in the structuring of the transaction, not least the Shari’a compliance aspect.
Subsequently, Volaw assisted in the establishment of the Al Safeena Sukuk structure, and has been active in assisting several Islamic institutions in planning other Sukuk issuance structures.
For further information on Islamic Finance matters contact Trevor Norman of Volaw.