Press Release

Morgan Lewis Advises FWU Group on First Islamic Bond on Life Insurance Contracts

Wednesday, October 9, 2013

DUBAI, 9 October 2013: Global law firm Morgan Lewis announces that it has advised European based multinational insurance group, FWU Group (FWU) on their US$100 million Sukuk Al-Wakala programme. The first tranche of the programme, of US$20 million, has now closed, having been oversubscribed. This represents the first time an Islamic bond structure has been deployed on top of a block of life insurance contracts. The Sukuk will fund, in a fully Shari’a-compliant manner, a set of ReTakaful (re-insurance) transactions for one of FWU’s five main subsidiaries, ATLANTICLUX Lebensversicherung S.A. (Atlanticlux). The Sukuk is asset-backed, representing a true ring-fencing of assets, and the amount raised will be used to fund sales commissions on unit-linked life insurance policies.

This transaction is a securitization of Takaful insurance policies and provides an opportunity for investors to participate and invest in Sukuk certificates backed by FWU subsidiary, Atlanticlux, a BBB rated, multinational insurance provider.

Ayman A. Khaleq, Dubai based partner in Morgan Lewis’s Business & Finance practice, acted as lead counsel to the transaction, with support from associate Amanjit K. Fagura. London based Business & Finance partners Bruce Johnston and Lewis Jones provided English law opinion.

Mr Khaleq said: “We are delighted to have assisted our client FWU on this unique transaction. It is a privilege to be a part of the development of the Islamic finance industry by advising on yet another first of a kind transaction like this.”

The Sukuk has been assigned an investment grade credit rating by Fitch and will be issued in amortizing tranches, each with a term of five years, and an average life of approximately 2.5 years. Distributions will be made quarterly to investors on a fully amortizing basis and the profit rate is expected to be 7.00 per cent per annum.

The lead arranger and bookrunner for this issuance, EIIB-Rasmala, comprises the AIM-listed European Islamic Investment Bank Plc (“EIIB”) and Rasmala Group (“Rasmala”).

Bedell Cristin Guernsey Partnership acted as Guernsey counsel to the Issue and Issuer and Amanie Advisors acted as Shari’a advisor to FWU.