UK

Al Rayan Bank #UK’s £250mn #sukuk priced at 80 bps over 3-month Libor

Al Rayan Bank UK has priced its £250mn Islamic bond "Tolkien Funding Sukuk No 1" at 80 basis points over three-month Libor (London Inter-bank Offered Rate). The transaction is secured by a portfolio of prime UK, first-charge, owner-occupied, home purchase plans, originated by Al Rayan Bank. The sterling-denominated sukuk has an expected called weighted average life of three years. Proceeds raised from the sukuk issuance would be used by Al Rayan Bank to fund further growth in its asset book, which has increased by more than 23% over the last 12 months. Such residential mortgage backed securities (RMBS) are relatively rare in Islamic finance. The bank believes that there would be more opportunities to issue sukuk in the future and a higher potential for other Islamic banks to tap into the RMBS market.

For Islamic banks, Shariah compliance is a foundation attribute

Because Shariah compliance is essential for all Islamic banks, it does not distinguish one Islamic bank from another. Hence it is a foundation attribute. About 25 years ago, Price Waterhouse made a distinction between foundation attributes and leverage attributes. Foundation attributes convey no competitive advantage. Al Rayan Bank is the only Islamic bank in the UK which targets ordinary retail customers. The bank's homepage gives very prominent coverage to its Shariah compliance. That is because Al Rayan is not competing against other retail Islamic banks but rather seeking to create a retail Islamic finance market where none has existed before.

First #UK RMBS #sukuk attracts institutional investor interest

UK-based Al-Rayan Bank has issued a £250 million ($347 million) sukuk using a residential mortgage-backed securitisation (RMBS). The financial institution predicts this could be the start of a raft of other Islamic banks entering the RMBS market. Al-Rayan Bank has appointed Standard Chartered to arrange investor meetings ahead of the issue. The sukuk has generated investor interest from asset managers and fund managers all over the world. Early indications put pricing in the area of 80 basis points over the 3 month London interbank offered rate. The issuance is backed by a portfolio of home purchase plans from clients in England and Wales, with loans set to mature in 2052. A special purpose vehicle will issue sukuk certificates backed by these loans.

Gatehouse Bank plans growth in Shariah-compliant home finance market

Gatehouse Bank says it is targeting significant growth in the Shariah-compliant home finance market with a new customer service centre in Milton Keynes. The Bank says its new strategy will focus more on home finance plans in addition to its current buy-to-let products and development/build-to-rent division. Charles Haresnape, CEO of Gatehouse Bank, says the bank plans to grow all areas of the business but Shariah-compliant home finance will be a particular focus. Haresnape believes this is a hugely untapped market and one that, being fundamentally ethical, will resonate with Muslims and non-Muslims alike.

Al Rayan looks beyond the Shire with #sukuk RMBS

Al Rayan Bank has started marketing Tolkien Funding Sukuk No. 1, the first UK RMBS issue to be structured on Islamic finance principles. Islamic banks can't access central bank facilities, which means the wholesale markets are fuelling the firm's ambitious expansion plans.

London court again finds for creditors in Dana Gas #sukuk dispute

A London High Court judge again ruled in favour of creditors in a dispute over whether Dana Gas must repay $700mln sukuk. Judge George Leggatt rejected an attempt by the company to overturn his decision last November that the purchase undertaking behind the sukuk was valid and enforceable. There was no immediate comment from Dana.

Al Rayan Bank plans 250 mln pound mortgage-backed #sukuk

Al Rayan Bank has mandated banks to raise 250 million pounds ($352 million) via sukuk, using a residential mortgage-backed securitisation. Al Rayan has appointed Standard Chartered and Masraf Al Rayan to arrange investor meetings. The sukuk would help fund Al Rayan's ongoing efforts to expand into commercial real estate, private banking and financing for small- and medium-sized businesses. The portfolio would consist of Home Purchase Plans secured by residential properties, with a current pool balance of approximately 300 million pounds. The sukuk would securitise contracts known as diminishing musharakah with ijara finance, akin to reducing co-ownership arrangements, secured by residential properties located in England and Wales.

Gatehouse Bank expands residential team with appointments from Al Rayan

London-based Gatehouse Bank has expanded its residential home finance team with two new appointments. Umar Ali joins Gatehouse Bank as Head of Home Finance after five years at Al Rayan Bank. Junaid Sarwar has been appointed as a London-based Business Development Manager. Junaid also joins after six years at Al Rayan Bank and has held previous roles at Santander and Barclays Bank. Paul Stockwell, Gatehouse Bank’s CCO, said the bank managed to build a strong team of experienced specialists as it expands into the residential home finance sector.

Gatehouse Bank partners with Blueprint Real Estate Company

London based Gatehouse Bank has partnered with Kuwait based Blueprint Real Estate Company to offer finance to expats looking to purchase property in the UK. Gatehouse Bank says this forms part of the strategy of its move into the home finance business. At the same time, Gatehouse Bank announced an expansion to its residential home finance team. Umar Ali has been appointed as head of home finance, while Junaid Sarwar has joined as a business development manager.

British International Campaign to Attract Islamic Investments

The UK's Department of International Trade has announced the launch of a wide-ranging campaign in the Middle East and the Gulf to encourage investment in the UK. London is considered the largest market for Islamic finance outside the Islamic world and has more than 20 banks providing Islamic financial services. According to the Dubai-based Media and Communications Center, Britain ranks 22nd out of 124 countries in the world that use Islamic banking, placing it first in Europe and fourth among non-Muslim majority countries after Singapore, Sri Lanka and South Africa. Supportive government policies created a tax and regulatory framework aimed at expanding the Islamic finance market, including the elimination of double taxation, the extension of Islamic mortgage tax and the reform of debt arrangements. The United Kingdom is the first sovereign Western country to issue sovereign sukuk. In September, London also hosted the fourth annual meeting of the Global Islamic Finance and Investment Group (GIFIG) to discuss inter-state cooperation.

#UK Firm Launches Sharia-Compliant Home #Insurance

Green Dome Financial Services has launched the UK's first Sharia-compliant home insurance policy. The company has begun selling policies that meet Islamic restrictions on uncertainty and usury, or unreasonably high interest rates, while falling within the scope of the U.K.’s Financial Conduct Authority.

BEP Systems to deliver Gatehouse Bank’s residential financing processes

BEP Systems has added Gatehouse Bank to its roster of financiers using their customisable Apprivo2 system. Gatehouse Bank will use the new system to help make their business more efficient. For Gatehouse Bank, BEP have re-configured their systems to comply with Shariah requirements when dealing with home purchase plans. Charles Haresnape, CEO of Gatehouse Bank, said it was vital that the software house understood Shariah requirements and BEP Systems delivered excellent solutions across home purchase plans and buy-to-let financing. Chris Little, managing director of BEP Systems, said Gatehouse Bank had seen the advantages Apprivo2 and strategic advantages would be delivered to fit their business model. He added that Apprivo2 was the fastest growing system in the UK serving specialist finance providers.

Dana Gas says appeal against BlackRock joining #sukuk trial rejected

The English Court of Appeal has refused Dana Gas' appeal against fund manager BlackRock to participate in English court proceedings. Dana is refusing to redeem its $700 million outstanding sukuk on the grounds that they are no longer sharia-compliant and therefore unlawful in the United Arab Emirates. Courts in both Britain and the UAE are hearing the case. On November 17 the English High Court ruled in favour of the sukuk holders. Dana plans to set aside this judgement on the grounds that the company was not permitted to represent itself in court. Regardless of the result of that application, additional legal proceedings in England are expected.

Dana Gas says #UAE court allows it to appeal British #sukuk ruling

Dana Gas announced it will appeal against a British court’s ruling on its $700 million sukuk, after a UAE court lifted an injunction preventing it from participating in the British proceedings. Dana previously said the sukuk was invalid under UAE law and refused to repay holders of the sukuk which matured at the end of October. The energy producer sought a declaration on the sukuk’s lawfulness at courts in the UAE and Britain. Last month, a British court ruled in favour of Dana creditors, deciding the purchase undertaking was valid and enforceable. Dana has said it aimed to appeal against the ruling because it could not take part in proceedings. A hearing in Sharjah on the validity of the sukuk under UAE law is scheduled for Dec. 25.

Dana Gas seen returning to table after London ruling

Dana Gas plans to appeal the UK court ruling on $700mn of its outstanding sukuk. According to Dana Gas, the decision by the London court is flawed because the UAE-based company was barred from participating in the proceedings due to an injunction at home. Judge George Leggatt said the English law contracts are enforceable in the case. Dana was challenging a provision called purchase undertaking, which allowed the trustee on behalf of investors to force Dana to buy them out of the agreement at par. Dana shares fell as much as 5.6% on the Abu Dhabi stock market on Sunday. The court ruling puts investors one step closer to resolving a dispute over the sukuk that highlighted one of the Islamic finance industry’s weak spots.

Dubai investors digest implications for #sukuk market after Dana Gas ruling

A High Court judge in London ruled in favour of creditors in a case regarding the validity of the purchase undertaking for about $700 million of sukuk issued by Dana Gas. The idea that Dana Gas has been able to assert for the past five months that its own sukuk were non-sharia-compliant has struck many observers as unusual. Judge George Leggatt said that Dana Gas' challenges to the validity and enforceability of the purchase undertaking were unfounded and declared the purchase undertaking for Dana's sukuk as valid and enforceable.

'We've been badly served by banks': the small firms seeking #ethical #banking

Dave Fishwick, the founder of Burnley Savings and Loans, put millions of pounds behind the belief that there’s a demand for ethical banking. He aims to link local savers with small and medium-sized enterprises (SMEs) in need of finance, run by a locally based bank manager who makes lending decisions based on deep personal knowledge, rather than an algorithm. Fishwick believes that ethical banks are needed: small, simple, honest banks run by the community to serve the community. While SMEs often can’t get loans from major banks, Conrad Ford, CEO of Funding Options, notes that a wave of challenger banks are offering help. They include Metro Bank, Civilised Bank and Greater London Mutual, all with an emphasis on integration with a defined community or locality.

Dana Gas shares fall 4.17% on London #sukuk ruling

Dana Gas share prices fell 4.17% following Friday’s English High Court ruling against Dana Gas and in favour of bondholders. Danas said it plans to appeal the decision by the London court that declared the company’s $700 million sukuk valid and enforceable. Friday’s ruling was made in Dana Gas’s absence from the court. Dana Gas had earlier refused to repay debt owed to investors for two mudaraba sukuk worth $350 million each. The latest ruling does not mean that Dana Gas has to pay bondholders just yet, with another hearing in a UAE court scheduled for December 25.

Shepherd and Wedderburn secures Islamic finance deal

Shepherd and Wedderburn has completed the Shariah-compliant refinancing of high-value office accommodation in Aberdeen. The properties, which total 159,170 sq ft of floor space, are fully let to the oil and gas service provider Petrofac as its North Sea office headquarters and NHS Scotland. The funding was completed by way of a commodity murabaha facility from an established international bank. Peter Alderdice, a senior associate at Shepherd and Wedderburn, said the team was pleased to have used its expertise in Islamic finance to help secure the refinancing of two of the largest commercial properties in the city.

English court rules in favour of Dana Gas bondholders in key Islamic bond case

An English High Court judge has ruled in favour of Dana Gas’s bondholders, reported the Financial Times.

More details at the source.

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