Rasameel Structured Finance Company, announces that its Dubai based wholly owned subsidiary, Rasameel Investment Bank Limited, has signed a formal agreement with Ejarah Global Limited to jointly develop an Ejarah Investment Program of up to $500m over the next three years.
The Ejarah Investment Program will develop and launch a series of Sukuk issuances fully backed by commercial equipment and machinery on lease to high credit quality corporate and public sector entities in North America, the United Kingdom, Europe and Australasia. The Ejarah Investment Program will deliver attractive risk-adjusted Shariah compliant fixed income to wholesale investors in the Middle East and other Islamic markets.
Following the successful GBP200m UK sovereign sukuk issued in July 2014, which attracted investor demands of GBP2bn, the Ejarah Investment Program will be launched later this year and will include Sukuk backed by UK-based equipment leases. Other Sukuk offerings will be denominated in US Dollars, Australian Dollars, Canadian Dollars and Euros to bring to the Shariah compliant investment market for the first time an internationally diversified strategy for liquidity management.
Chairman of Rasameel Investment Bank, Mr. Issam Z Al-Tawari, in regard to the new agreement says that “We are very pleased to be working with Ejarah Global to develop the Ejarah Investment Program, comprising diversified pools of international equipment leases that will be securitised as investment grade sukuk. This partnership significantly complements Rasameel’s existing securitisation strategy within the local Kuwaiti market.”
Further commenting on the strategic rationale behind this new initiative, Mr Al-Tawari further comments: “We see significant demand for multi-currency denominated Sukuk issues, from both Shariah compliant and conventional wholesale investors. Rasameel and Ejarah Global intend for the asset-backed Sukuk issues to be listed for trading on suitable exchanges, which will enable investors to better manage liquidity, reduce asset-liability duration mismatch, diversify their investment portfolios, and provide attractive risk-adjusted returns relative to current liquidity products such as Murabaha and Wakala.”
Managing Director and co-Founder of Ejarah Global, Mr. Mark Mortimore, adds: “We are proud to be working together with Rasameel to develop the Ejarah Investment Program. This initiative was proposed to us on the basis that the Shariah compliant investment market urgently needs many more high-quality, well-priced fixed income products. Sukuk issuances that are fully asset backed by equipment lease portfolios are very compliant with Shariah principles.”
Describing the vision of the two companies, Mark Mortimore further explains: “We recognized the synergy that exists between Rasameel Structured Finance and Ejarah Global and saw that a formal business partnership made very good sense. The Ejarah Global team brings high level international leasing expertise that is unique to this market, along with impressive track records of innovation and performance. We look forward to delivering a wide range of attractive Shariah compliant fixed income products from each of our international leasing markets, through the Ejarah Investment Program.”
Industry analysts and practitioners all agree that Islamic Financial Institutions, Pension Funds, Waqf institutions, Governmental bodies, and Private Offices are demanding far more Sukuk issues and more diversification with regard such issues. Rasameel Structured Finance and Ejarah Global are striving to meet some of that demand through the new Ejarah Investment Program.