Best sukuk deal: Maybank tier 2 capital

Islamic Finance Awards

Maybank president and CEO Datuk Amirsham Aziz: first to raise subordinated bank capital in a islamic sukuk

Size isn't everything. This is certainly the case for the winning islamic sukuk deal, at only $300 million. Malaysia's Maybank became the first bank to raise subordinated bank capital in the form of a islamic sukuk. AseamBankers, HSBC Amanah and UBS led the deal for the Malaysian borrower, which was eventually priced as the tightest deal ever from an issuer in the southeast Asian nation, and the second-tightest subordinated debt deal from Asia, ex-Japan.

Maybank decided to undertake this form of transaction in order to diversify its investor base and allow Islamic investors to participate. The offering received an overwhelming response from international investors -- both Islamic and conventional -- that generated a solid, eight times oversubscribed order book of $2.4 billion. The deal was placed with 72 investors, with an average ticket size of $4.4 million despite 55 investors placing orders of more than $50 million. High demand drove the deal to price two basis points tighter than the guidance price of 35bp.

Despite this, some bankers quibbled that some points were still left on the table when the deal shot through the 30bp barrier only days after it was priced. But Public Bank's 10-year deal, which is an obvious comparable, was priced at Libor plus 37bp. This comparison reinforced the claim that Maybank's islamic sukuk was competitively priced.

About 64% of the paper went to investors in Asia, 13% to the Middle East and 23% to Europe. Commercial banks accounted for 60% of the deal, asset managers took 28%, and 9% went to institutional investors. Private banks bought the remaining 3%.

Metrodata will publish Islamic Sukuk Ijarah.

PT Metrodata Electronics Tbk will publish Sukuk Ijarah with maximum value of Milliard Rp100 with duration during five year for akuisisi 100% share of Solitius Asian of Pte. Ltd and working capital.

Solitus Asia is company which active in SAP Consultancy and other software program consultancy. this Islamic Sukuk Ijarah Metrodata get peringkat of A3Id, outlook stable or equivalent of minus A single of PT Moody’S Indonesia.

Price offer of sukuk equal to 100%. this Obligation Moslem law is targeted to get permit of Bapepam-Lk at mid of this June. Record-Keeping in Effect Exchange Indonesia planned at July 2008. PT Pledge of Artha Advisindo Sekuritas act as guarantor of his emission.

“ We choose Islamic Sukuk Ijarah because the market of still very notable. Besides, us business system which generally leasing with big company, ad for using Sukuk Ijarah,” clear of Corporate Secretary PT Metrodata Electronics Tbk Susanto Djaja, public presentation moment, this noon.

From monetary performance side, copartnership till 31 March 2008 booking growth of sale 40,21% from Rp466 milliard quarterly I / 2007 mounting to become Rp653 milliard, quarterly I / 2008.

Encore Management S.A. Assigns Michael Gassner Consultancy Ltd as Marketing, PR and Sales Strategy Advisor for the 1st GCC Open-ended Sukuk Fund

Michael Gassner Consultancy Ltd. has been retained as the Marketing, Public Relation and Sales Strategy Advisor for the first GCC open-ended Sukuk fund, Sanad Sukuk Fund, by Encore Management S.A., the fund’s sponsor.

Michael Saleh Gassner, Managing Director of Michael Gassner Consultancy Ltd., comments on the assignment, “For too long Muslims could not achieve a proper diversified investment strategy, income was associated with illiquidity, and proper goal-based asset allocation could not be achieved. This has now changed”, Gassner concludes, “We will do our best to explain and communicate this important development to the Islamic finance industry.”

The Sanad Sukuk Fund will be launched before year end and targets both individual and institutional investors. The fund seeks to partner with retail banks—in particular those dedicated to serving Muslim customers—as well as other investing institutions.

Encore Management S.A., Geneva, is setting up the fund management company as wholly owned subsidiary in the Cayman Islands. John A. Sandwick, CEO of Encore Management S.A., says about the assignment: “We wanted to have a substitute for bond investments for our own Saudi clients, as none was available. The decision was taken to create the vehicle we needed ourselves. With Michael Gassner we found the right support to communicate our product to the Islamic finance industry.”

An important effect of the fund’s launch will be the impact on Sukuk market activity. In all of 2005 there were only about $60 million in GCC-style Sukuk secondary market trades, a tiny fraction of the estimated $15 billion of Sukuk that were outstanding at the end of last year. With the introduction of the Sanad Sukuk Fund—targeted to reach at least in the $100 million or more in size—secondary market trading should substantially increase. Economists the world over point out that increased market trading and liquidity of all securities is a core component of economic development, fostering increased issuance of securities and thereby contributing to economic growth.

Note to Editors:
Sukuk , the plural of the Arabic word Sakk, means “certificate” or sometimes “credit note.” It is also the root for the English word “cheque.” Sukuk replace interest income with rent or profits; they are therefore the alternative for Muslims seeking a stable income complying with their faith. Sukuk finance real economic activities and, depending on the underlying structure, they are tradable at market value from the Islamic perspective. Secondary market trading is still weak in the GCC region, as Sukuk are relatively new. Significant new Sukuk issuance has only recently increased, while near-term expected new issuance is expected to increase dramatically. Japan, China and Indonesia are among many market entrants expected to enter the Sukuk market in 2007, while at least 100 or more companies based in the Arab world are believed to be readying new Sukuk issues.

* Sanad is the Islamic Income Fund for the GCC investor seeking stable returns with liquidity
* Sanad closes a major gap for all Muslim investors by allowing them to finally own a diversified, managed pool of sharia-approved sukuk, equivalent to a bond fund in conventional investing
* Investments are undertaken in sharia compliant Sukuk and Islamic debt syndications predominantly in the GCC countries—which adds liquidity to the Sukuk sector and promotes economic growth in all Muslim countries, but particularly in the GCC region

New Book 'Financial Risk Management for Islamic Banking and Finance' Successfully Launched by IRIS Integrated Risk Management ag

IRIS integrated risk management ag (www.irisunified.com) consulting collaborators Drs. Ioannis Akkizidis and Sunil Kumar Khandelwal co-author "Financial Risk Management for Islamic Banking and Finance".

The book, published by the British academic specialist Palgrave Macmillan, covers all risk management issues for all Islamic financial products and services, including Mushãrakah, Mudãrabah, Murãbaha, Salam, Ijãrah and Istisnã, considering all of their unique characteristics according to the Shariah principles. In addition, the authors discuss the Islamic Financial Services Board's principles of risk management and Basel II.

Because of its comprehensive approach "Financial Risk Management for Islamic Banking and Finance" not only constitutes an excellent introduction to the complexity of Islamic finance products but also proves to be essential for the expert looking for an in-depth analysis on how to identify and manage risks in Islamic Finance.

"Financial Risk Management for Islamic Banking and Finance" was out of stock within the first week of publication.

The book can be purchased online at Palgrave Macmillan (http://www.palgrave.com/products/title.aspx?PID=280638).

About the authors

Dr. Ioannis Akkizidis is a Risk Management Consultant and Analyst at financial analysis solutions specialist in IRIS integrated risk management ag. He is also the author of the bestseller book "Integrating Market, Credit and Operational Risk: A Complete Guide for Bankers & Risk Professionals" (Riskbooks, 2006) and of the "Guide to Optimal Operational Risk and Basel II" (Auerbach Publications, 2005).

Dr. Sunil Kumar Khandelwal, Head of Risk Management Middle East, IRIS integrated risk management ag is specialized in Basel II, Operational Risk and Islamic Finance. He is a regular contributor of relevant expert publications in the fields of risk management and Islamic banking.

About IRIS

IRIS integrated risk management ag (http://www.irisunified.com), formed in 1992 in Zurich, has its headquarters in Switzerland. It continuously develops, maintains and supports its riskpro? financial analysis infrastructure out of Switzerland since 1997. Delivery, implementation and consulting are executed worldwide directly by IRIS AG and indirectly in cooperation with a number of local partners.

Mark Mortimore Appointed as Executive Director to the World's First GCC-oriented Sukuk Fund

Mark Mortimore is appointed as Executive Director to the world’s first GCC-oriented Islamic Sukuk fund, Sanad Sukuk Fund, announced Encore Fund Management Co. Ltd, a wholly owned subsidiary of Encore Management S.A., Geneva.

He will be responsible for managing the Islamic bond fund in accordance with its investment and Sharia compliance criteria. Mr. Mortimore has a professional track record that encompasses senior management positions with Barclays Bank, Manufacturers Hanover Bank, GE Capital, Riyad Bank, United Bank of Kuwait and Arab Banking Corporation. He is an expert in structuring asset-backed finance transactions and has worked for 25 years in the banking markets of North America, Europe and the GCC region. His Middle East banking experience began in 1993 when he was based in Riyadh, Saudi Arabia, where he worked as a senior corporate banking officer. Mr. Mortimore now has specialised in Islamic Finance for ten years and has extensive experience in Islamic fund management and structuring Ijarah, Sukuk and Murabaha transactions.

The Managing Director of Encore Management S.A. , John A. Sandwick, commented on the assignment: “We are extremely pleased to appoint Mark Mortimore for this key position. He has a wealth of experience and substantial network across the industry, and with him we are going on a fast path to establish the much needed world`s first GCC-open ended Islamic Sukuk fund.”

Mark Mortimore has successfully executed a number of ground-breaking Islamic asset financings including the world’s first Sharia-compliant Ijarah agreement on a large fleet of inter-modal shipping containers; the first combined Islamic Sukuk and conventional financing structure for a single shipping asset; and the first major Murabaha installment sale contract on heavy equipment for use by a significant construction company in north Africa.

John A. Sandwick, concludes, “Mark’s extensive experience in the Islamic banking industry adds tremendous value to our Sukuk fund. This clearly demonstrates that the fund has the ability to close a major gap in the market, with its investments in Sukuk and Islamic commercial syndications being equivalent to a bond fund in conventional investing.”

An important effect of the fund’s launch will be the impact on Islamic Sukuk market activity. In all of 2005 there were only about $60 million in GCC-style Sukuk secondary market transactions, a tiny fraction of the estimated $15 billion of Sukuk that were outstanding at the end of last year. With the introduction of the Sanad Sukuk Fund—targeted to reach at least $100 million or more in size—secondary market trading should substantially increase. Economists the world over point out that increased market trading and liquidity of all securities is a core component of economic development, fostering increased issuance of securities and thereby contributing to economic growth.

Note to Editors:
Sukuk, the plural of the Arabic word Sakk, means “certificate” or sometimes “credit note.” It is also the root for the English word “cheque.” Sukuk replace interest income with rent or profits; they are therefore the alternative for Muslims seeking a stable income complying with their faith. Sukuk finance real economic activities and, depending on the underlying structure, they are tradable at market value from the Islamic perspective. Secondary market trading is still weak in the GCC region, as Sukuk are relatively new. Significant new Sukuk issuance has only recently increased, while near-term expected new issuance is expected to increase dramatically. Japan, China and Indonesia are among many market entrants expected to enter the Sukuk market in 2007, while at least 100 or more companies based in the Arab world are believed to be readying new Sukuk issues.

About Sanad Investment Co. Ltd.
Sanad Investment Co. Ltd. -- or the Sanad Sukuk Fund -- is the first GCC-oriented Sukuk fund in the world. It will provide both stable income and liquidity for Muslim investors. It closes the significant gap for Muslim investors in their asset allocation by finally providing a bond-like investment vehicle that is fully sharia compliant. All investments made by the Sanad Sukuk Fund will be in not less than 75% Islamic Sukuk and maximum of 25 % regional sharia-compliant credit syndications, predominantly in the GCC countries. Expanding the Sukuk market by creating a Sukuk fund directly leads to increased economic development in the GCC region. The fund is being domiciled in the Cayman Islands, as is its manager Encore Fund Management Co. Ltd., a wholly owned subsidiary of Encore Management S.A. in Geneva, Switzerland. The Sanad Sukuk Fund targets institutional and individual investors of all kinds. The fund’s website -- www.sanadfund.com -- will be launched alongside the fund itself

About Encore Management S.A.
Encore Management S.A. was founded in 1998 to serve private clients in the management of their family long-term savings, whether through portfolio investments, private equity, or real estate. The firm has established deep institutional relationships in Switzerland, in particular working in partnership with UBS S.A., the world’s largest asset management bank. Encore’s principles are bankers of long standing in the Swiss private banking and asset management businesses. The company remains very active in the Islamic banking space, and has frequently promoted increased transparency and sharia-compliant securities development through conferences and both print and electronic media. Encore’s wholly owned subsidiary -- Encore Fund Management Co. Ltd. -- was created to manage the new Sanad Sukuk Fund, as well as other future Islamic strategy portfolios.

Issued on behalf of Sanad Investment Co. Ltd.

SHAPE Financial Corp. Assigned as Sharia Advisor for the World's First GCC-oriented Sukuk Fund

Leading international Islamic finance advisory company SHAPE™ Financial Corp. has been retained as the Sharia Advisor to the Sanad Islamic Sukuk Fund. Additionally, SHAPE’s President & CEO Abdulkader Thomas will serve on the fund’s Investment Committee.

Mr. Thomas comments on the assignment from Kuwait: “We are delighted to advise the world’s first open-ended GCC-oriented Sukuk fund. Our Sharia Board -- consisting of Shaykh Nizam Yaquby and Shaykh Yussuf Talal DeLorenzo -- will audit the fund’s transactions and sukuk selections. The fund aims to offer income-oriented returns combined with stability of principle and liquidity, all while complying with Sharia interpretations prevalent in the GCC.” The fund’s formal Sharia board will be assisted by SHAPE™’s Sharia controller Mr. Muhamed Becic, a graduate in fiqh from the University of Madina.

The Sanad Sukuk Fund will be launched before year end and targets both individual and institutional investors. The fund seeks to partner with retail banks -- in particular those dedicated to serving Muslim customers -- as well as other investing institutions.

Encore Management S.A., Geneva, is setting up the fund management company as a wholly owned subsidiary in the Cayman Islands. John A. Sandwick, Encore’s managing director, says: “We have long sought a substitute for bond investments for our own Saudi and other Arab clients, but until now nothing was available. We finally made decision to create our own fund to serve Muslim investors, as the time was finally right for such an investment vehicle. Encore engaged SHAPE™ as the fund’s Sharia advisor to insure we have one of the world’s best group of scholars and bankers supporting the fund’s compliance with the requirements of our GCC-based clients.”

An important effect of the fund’s launch will be the impact on Sukuk market activity. In all of 2005 there were only about $60 million in GCC-style Sukuk secondary market transactions, a tiny fraction of the estimated $15 billion of Sukuk that were outstanding at the end of last year. With the introduction of the Sanad Sukuk Fund—targeted to reach at least $100 million or more in size -- secondary market trading should substantially increase. Economists the world over point out that increased market trading and liquidity of all securities is a core component of economic development, fostering increased issuance of securities and thereby contributing to economic growth.

Note to Editors:
Islamic Sukuk , the plural of the Arabic word Sakk, means “certificate” or sometimes “credit note.” It is also the root for the English word “cheque.” Sukuk replace interest income with rent or profits; they are therefore the alternative for Muslims seeking a stable income complying with their faith. Sukuk finance real economic activities and, depending on the underlying structure, they are tradable at market value from the Islamic perspective. Secondary market trading is still weak in the GCC region, as Sukuk are relatively new. Significant new Sukuk issuance has only recently increased, while near-term expected new issuance is expected to increase dramatically. Japan, China and Indonesia are among many market entrants expected to enter the Sukuk market in 2007, while at least 100 or more companies based in the Arab world are believed to be readying new Sukuk issues.

About Sanad Investment Co. Ltd.
Sanad Investment Co. Ltd. -- or the Sanad Sukuk Fund -- is the first GCC-oriented Sukuk fund in the world. It will provide both stable income and liquidity for Muslim investors. It closes the significant gap for Muslim investors in their asset allocation by finally providing a bond-like investment vehicle that is fully sharia compliant. All investments made by the Sanad Sukuk Fund will be in not less than 75% Sukuk and to a maximum of 25 % sharia-compliant credit syndications, predominantly in the GCC countries. Expanding the Sukuk market by creating a Islamic Sukuk fund directly leads to increased economic development in the GCC region. The fund is being domiciled in the Cayman Islands, as is its manager Encore Fund Management Co. Ltd., a wholly owned subsidiary of Encore Management S.A. in Geneva, Switzerland. The Sanad Sukuk Fund targets institutional and individual investors of all kinds. The fund’s website -- www.sanadfund.com -- will be launched alongside the fund itself

About Encore Management S.A.
Encore Management S.A. was founded in 1998 to serve private clients in the management of their family long-term savings, whether through portfolio investments, private equity, or real estate. The firm has established deep institutional relationships in Switzerland, in particular working in partnership with UBS S.A., the world’s largest asset management bank. Encore’s principles are bankers of long standing in the Swiss private banking and asset management businesses. The company remains very active in the Islamic banking space, and has frequently promoted increased transparency and sharia-compliant securities development through conferences and both print and electronic media. Encore’s wholly owned subsidiary -- Encore Fund Management Co. Ltd. -- was created to manage the new Sanad Sukuk Fund, as well as other future Islamic strategy portfolios.

About SHAPE™ Financial corp.
With offices in Virginia (United States) and Kuwait, SHAPE Financial Corp. (“SHAPE™) is a leading knowledge resource for Islamic banking & finance. A member of Alshaya Group International, SHAPE™ provides structuring and transaction advice to the Islamic financial markets on a global basis. A knowledge-based firm, SHAPE™ has developed a rich universe of training and concept materials geared to the Islamic financial market. SHAPE™’s focus is problem solving clients who benefit from cost-effective external Sharia-driven solution providers.

Sharia´a Advisory: SHAPE™ is pleased to enjoy excellent relationships with Islamic scholars around the globe and has the capacity to draw on the resources of www.ajif.org. Nonetheless, SHAPE™ has been honored with close, long-term relationships with two of the leading scholars of Islam.

The Best sukuk house: CIMB Islamic

CIMB Islamic had an impressive year in 2007. Not only has the Malaysian bank come top of the ISI emerging markets global Islamic sukuk manager league tables, its name also turns up on nearly all of the most memorable 2007 sukuks.

Among the influential transactions that CIMB Islamic worked on was Cherating Capital's $850 million sukuk, Nucleus Avenue Berhad's three-part deal, and Cagamas's M$2.11 billion ($645 million) Islamic residential mortgage backed securities (IRMBS) transaction.

Cherating Capital completed its exchangeable sukuk in record time, with an order book that was 13 times oversubscribed. The demand enabled CIMB Islamic to price the deal at the Libor swap rate minus 90 basis points, the lowest price ever for a US dollar sukuk.

More than 50% of the deal was placed with Middle Eastern investors, a record Middle Eastern participation rate for an equity-linked offering. In addition to this, the Islamic sukuk is the largest equity-linked issue out of Malaysia, surpassing Khazanah's deal, which won Euromoney 's sukuk deal of the year award last year.

Nucleus Avenue claimed another title -- the first of its kind hybrid sukuk. The M$1.7 billion non-convertible junior sukuk also had a 50-year tenor -- the longest in the world.

In the past 12 months, CIMB Islamic has made itself a clear leader in the Islamic sukuk world as it drives to develop and deepen the Islamic capital markets. With 21 sukuks due to complete between December 2007 and March 2008, the bank is not taking its foot off the accelerator.

Sukuk Characteristic

This is the sukuk's characteristic
• Beneficial title
• Coupon income, margin, profit sharing, depend on the agreement (aqad)
• Free from riba (interest), gharar (uncertainty), and maysir (gambling).
• Issued through special purpose vehicle (SPV)
• Underlying asset needed.
• Proceeds adjusted to Shariah Principe.