Germany's FWU issues rare asset-backed sukuk

FWU Group, a Munich-based financial services company, has issued a $20 million five-year Islamic bond backed by insurance policies. FWU, which offers takaful solutions, used a structure known as wakala. The sukuk is the first tranche of a $100 million programme rated BBB- by Fitch, and arranged by EIIB-Rasmala. Proceeds of FWU's sukuk, which carries a profit rate of 7 percent, will be used to fund a set of re-takaful transactions for its Luxembourg-based unit Atlanticlux, which is the ultimate obligor under the programme. The assets for the transaction are the beneficial rights of insurance policies; ownership is transferred to a Guernsey-based company which is in turn managed by AON PLC, which acts as the agent.