15/07/2014

On 9 July 2014, the Luxembourg Parliament approved the bill of law on a sale and buy-back transaction of real estate assets to a wholly owned Special Purpose Vehicle (“SPV”) by the Luxembourg State allowing the issuance of a Sukuk with a value of 200 million euros ($275 million). Three prime real estate assets underpin the Islamic bond, including the two towers of the Gate of Europe (Porte de l’Europe) on the Kirchberg Plateau, which is the main financial district and seat of the European Union bodies in Luxembourg. These assets will be sold to the SPV which will benefit from a general governmental guarantee. The SPV issues Sukuk which represents a right against the SPV to payment of a periodic distribution amount. The SPV acts as trustee on behalf of the Sukuk holders and leases the assets back for 5 years to the Luxembourg Government in consideration for a periodic payment of rental which will be equivalent to the periodic distribution amount payable by the SPV to the Sukuk holders. The approval of the bill of law on the issuance of sovereign Sukuk underlines the political will to diversify and develop alternative markets such as Islamic Finance within the financial services industry and establishes the Grand-Duchy as an integrative and diversified world class financial services hub.

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Florence Stainier

Florence Stainier is a Partner in the Investment Management practice of Arendt & Medernach where she specialises in legal and regulatory matters related to investment funds and management entities. She advises clients on the creation, structuring, marketing and operations of investment funds with a particular focus on UCITS, alternative UCITS, hedge funds and ETFs. She has been a member of the Luxembourg Bar since 2004 and was also a member of the Brussels Bar (Belgium) until 2013. She is participating in several working groups of the Association of the Luxembourg Fund Industry (ALFI) in particular relating to MIFID, Islamic finance and UCITS matters. Florence is also a member of the Luxembo...

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