Denton Wilde Sapte has advised the government of Qatar on the world's second Islamic bond and the Middle East's first.
The issue also saw Allen & Overy reinforce its credentials in this highly niche area. The magic cirle firm advised lead arranger HSBC Singapore, which it also advised on the world's first Islamic bond issue, a Malaysian transaction, last year.
A&O partner Kenneth Aboud acted on both deals. In the latest transaction Dentons partner Rahail Ali acted for the government of Qatar in the world's second and largest Islamic bond issue.
The schemes of arrangement are notoriously complex as they involve the issuing of bonds where parties receive no interest. Receipt of interest breaches Sharia, or Islamic, law.
In this complex transaction a Qatar incorporated special purpose vehicle (SPV), whose stock is owned by the government of Qatar and HSBC Middle East, issued bonds, known as trust certificates, valued at $700m (£413m) to investors, or bondholders.
The repayment of the trust certificates to the SPV was used to purchase a large plot of land from the government of Qatar. The SPV leased back the land to the government which intends to use it to build a medical city.
The government's rent payments to the SPV are equal to the payments due from the SPV to the certificate holders. The value of the rent was equivalent to the London Interbond Offered Rate (LIBOR) plus 0.4 per cent.
According to Ali, the ultimate owners of the land leased to the government under the deal are the bondholders. As the government's payments to the bondholders represent rental rather than floating rate bonds, the ban on receipt of interest under Sharia law was satisfied.