Euromoney Audit Training

A 3-day practical interactive training workshop with real life case studies featuring:

• The nature of the Shariah in modern commerce and finance, including its determination and application by Shariah Supervisory Boards and the issuance of fatawa in financial transactions
• The current state and anticipated future developments in Islamic finance markets
• Types of permissible sukuk and the standards and parameters applicable to the structuring of sukuk issuances
• Ijara (lease) structures
• Istisna'a (construction) structure
• Sukuk al-ijara
• Musharaka (joint venture and partnership) and sukuk al-musharaka
• Mudraraba (service-capital joint ventures and partnerships) and sukuk al-mudaraba
• Murabaha (sale at a mark-up) and the use of murabaha in sukuk and other financing structures
• Project financings and the use of sukuk in those financings, including single Islamic tranche issues
• Asset securitisation sukuk, including the study of current case studies of a residential sukuk and an oil and gas sukuk
• Bankruptcy of the East Cameron Oil and Gas Sukuk

Course background

The use of sukuk (Islamic bonds and asset securitisations) to access the financing side of capital markets, and as a backbone element in the development of Islamic capital markets, is one of the fastest growing areas of Islamic finance. Most issuances to date have been bond structures that are ultimately dependent upon a sovereign credit. However, the use of sukuk is rapidly expanding into other areas, including

(a) project, infrastructure and real estate financings;
(b) corporate financings;
(c) investment funds of all types; and
(d) true asset securitisations.

Illustrative of the perceived importance of sukuk to the field of Islamic finance, the Islamic Financial Services Board has undertaken an initiative to examine different categories of issues relating to the use of sukuk as the backbone for the finance side of Islamic capital markets.

The aim of this course is to familiarise individuals practising in Islamic finance and those practising in conventional finance with the principles, structures, and methodologies of, and practical transactional issues relating to the use of, sukuk in modern Islamic finance. That will also entail familiarisation with the various structures that underlie sukuk, including the ijara (lease), musharaka (joint venture), mudaraba (service-capital joint venture), murabaha (sale at a mark-up) and others.

Who should attend?

The following people, in both the Islamic finance and the conventional finance industries, should find this course of particular interest:

• Bankers
• Lawyers
• Investment bankers
• Export Credit Agency officers
• Multilateral lenders
• Special operations officers, including bankruptcy and work-out officers
• Project, infrastructure and real estate developers
• Government agency officers associated with project, infrastructure and real estate developments
• Construction contractors
• Equipment suppliers
• Oil and gas, petrochemical, electricity and other energy professionals
• Aircraft, vessel, rail and other transportation professionals
• Securities and capital markets regulators
• Investors, including Shariah-compliant investors
• Fund managers and asset managers
• Private equity professionals
• Treasurers and corporate finance professionals
• Entities involved in asset securitisations
• Insurers
• Finance lawyers
• Accountants

Day 1, Day 2 and Day 3

Part I: Background

• The Shariah in commerce and finance
• The influence of history on modern Islamic finance
• Fatawa in commerce and finance
• Shariah supervisory boards
• Overview of Islamic finance markets
• Some relevant Shariah principles and precepts
• Introduction to enforceability issues and effects on structuring
• What are Sukuk?

Part II: Fund structures

Part III: Ijara transactions

• Ijara structures
• Istisna’a – Ijara structures
• Transactional issues

Part IV: Sukuk structures and related transactional issues

• Generic sukuk structures
• Sukuk al-Ijara
• Mudaraba and sukuk al-Mudaraba
• Musharaka and sukuk al-Musharaka
• Murabaha and sukuk al-Murabaha
• Securitisation sukuk in the current markets
• Legal and ratings impediments
• Tamweel RMBS sukuk
• TECOM CMBS No. 1
• Other opportunities

Part V: Shariah-complaint project finance: Part A

• The single Islamic Tranche
• Bahrain financial harbour sukuk

Part VI: AAOIFI Shariah board clarification of March 2008

Part VII: Shariah-complaint project finance: Part B

Exercise: Converting a conventional oil and gas transaction to a Shariah-compliant transaction

Part VIII: Sukuk bankruptcies: East Cameron Oil an Gas Sukuk - case study

Part IX: Challenges and the future

• Michael McMillen

  Michael received his M.D. from the Albert Einstein College of Medicine, his J.D. from the University of Wisconsin Law School, and his B.B.A. from the University of Wisconsin – Madison School of Business. Michael has been a partner with major international law firms and has worked in New York, Dubai, Riyadh and London. Michael is internationally recognised for his work in Islamic finance and project finance. He publishes and speaks throughout the world on Islamic finance and project finance. He has twice been a recipient of the Euromoney award for Best Legal Advisor in Islamic Finance (2004 and 2007) and has also received the Sheikh Mohammed Bin Rashid Al-Maktoum award for Best Legal Advisor in Islamic Finance for North America. He has twice acted as Chair, and was the founding Chair, of the Islamic Law Section, a division of the International Law Section of the American Bar Association. Michael has also been active in the capital markets initiatives of the Islamic Financial Services Board, focusing on securities and capital markets laws, the use of trusts and trust concepts in capital markets transactions, and the enforceability of the Shari’ah in different jurisdictions throughout the world.

  Courses run by this instructor

  • Islamic Finance & Investment - Dubai
  • Islamic Finance Academy - Dubai

Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.

Islamic Finance Academy - Dubai

13-24 May 2012 (Dubai, United Arab Emirates)

This 10-day interactive program features everything you need to know about Islamic finance, banking, investment, contracts, bonds, insurance, and more. All modules are individually bookable so you can choose the topics which best suit you.

Islamic Finance & Investment - Dubai

18-22 Mar 2012 (Dubai, United Arab Emirates)

A workshop exploring contemporary Islamic finance and investment - commerce and finance in accordance with the principles and precepts of Islamic Shari’ah - from a transactional vantage and with particular emphasis on structuring financial transactions and products.