As issuers look for alternatives to the volatile European and US capital markets, the dual wakala-mudaraba sukuk will be the structure of choice for issuers looking to tap Islamic finance investors.
The structure was first used by HSBC Middle East for a $500 million issuance in 2011. It involved the addition of a mudaraba structure to an existing wakala structure to accommodate recent amendments to the UAE’s real estate laws in a way that complied with the shariah requirements of HSBC while being marketable to Islamic investors globally.
The...