International legal practice Norton Rose has acted for Kuwait Finance House ( Bahrain ) B.S.C.(c) as mandated lead arranger on the issue of US$200 million trust certificates by Diyaar Sukuk Company. Diyaar Sukuk Company is a Cayman incorporated special purpose vehicle. The Originator is Diyaar Al Muharraq W.L.L., a Bahraini incorporated company. The trust certificates are due 2011.
The Islamic structure deployed was Sukuk-al-Musharaka and involved the Issuer and the Originator entering into a Musharaka Agreement under which the Issuer contributed the sukuk proceeds received from investors and the Originator contributed certain reclaimed land to be used to develop a mixed used island real estate development. In line with a number of recent sukuks in the market, the Issuer's ownership interest in the musharaka assets will be leased to the originator (as lessee) and the rental income received by the Issuer from the Originator under the lease agreement will be used to pay the periodic distributions to the investors under the trust certificates.
The Diyaar Al Muharraq development, once completed, will be the largest real estate development project in Bahrain.
Via Exchange Handbook.