Hogan Lovells, a leading global law firm with specialty in Islamic finance, has expressed optimism that the successful launch of Sukuk bonds by three West African governments will open up a vast financing channel for the region and encourage the growth of Sukuk issuance in the region.
The Sukuks were listed on the Bourse Rgionale des Valeurs Mobilires (BRVM), Abidjan, Cote dIvoire last week. Altogether with the debut issuances for Senegal and Cote dIvoire, the combined listing value was CFA 766 billion.
Investors for the Sukuks were from a number of different countries across the Gulf and the Far East.
Partner, Islamic Finance, Hogan Lovells, Imran Mufti, who led the Hogan Lovells team, said the landmark Sukuk bonds will enhance the development of Islamic finance in West Africa.
We expect to see a steady increase in the use of Islamic financing in the region as governments seek to raise funds for key infrastructure projects in sectors such as transportation, telecoms and healthcare, Mufti said.
He added that the listing on the BRVM should improve liquidity of the Sukuks, thus achieving a key objective of the investors.
Manager, Sukuk Project, Islamic Corporation for the Development of the Private Sector (ICD), Zaky Sow noted that the transactions represented major milestone for Islamic finance in Africa as they cemented the use of alternative financing in the region.
According to Sow, while the new issues would build on the debut issuances and stimulate non-conventional investment further in Cote dIvoire and Senegal, the latest issuance by Togo will open up new stream of investment for the country.
We were very happy to work with Hogan Lovells team once again, knowing that they would provide a first class service and expert advice, as well as a deep understanding of the market, Sow stated.
Nigeria has also indicated plan to issue a sovereign Sukuk to source funds from non-interest sources and create a benchmark that will help to facilitate the growth of domestic non-interest bond market. Osun State was the first and only government to have issued a Sukuk in Nigeria.
Hogan Lovells has a first-rate reputation as a leader in Islamic finance, having advised on many first-of-their-kind transactions, such as the first major Sukuk by an African sovereign, the first convertible Sukuk, the first equity-linked Sukuk, the first Sharia-compliant securitisation, the first international Sukuk al-mudaraba and Sukuk al-musharaka, the first Sukuk buy-back, and the first Multilateral Investment Guarantee Agency (MIGA) guaranteed Islamic project financing.
Hogan Lovells has worked extensively with ICD in Africa over the last few years, having advised on the initial Sukuk issuances for Cote dIvoire and Senegal.
(c) SyndiGate
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