HSBC Bags Islamic Finance Awards
By James Kon

Bandar Seri Begawan - HSBC Amanah, the global Islamic financial services division of HSBC Group, has been named as the "Best International Islamic Bank", "Best Sukuk House" and "Best Project Finance House" in the Euromoney's 2007 Islamic Finance Award. HSBC Amanah also won the "Best Project Finance Deal" and "Best Sukuk Deal".

The Euromoney magazine said the decision to award HSBC was because of the bank's involvement in several landmark transactions, including its role as one of the lead managers of Malaysian investment holding company Khazanah's US$750 million five-year `Sukuk', the first Syariah-compliant exchangeable bond.

The magazine also commended HSBC for its lead manager role in the US$850 million five-year revolving 'Murabaha' facility for Kuwait Finance House, the largest Islamic financial institution deal.

Euromoney magazine said that HSBC's successes, in Saudi Arabia, the UAE and Malaysia were the reasons why the bank won the "Best Sukuk House" award.

Two particular transactions in particular caught the eye of the magazine namely "Khazanah" and "Sabic".

Khazanah was the largest ever equitylinked issue out of Malaysia and since January 2005 in Asia (ex Japan). HSBC acted as the joint bookrunner and joint lead manager for this transaction.

Meanwhile, Sabic was a SAR3 billion (US$800 million) five-year Syariahcompliant bond, for which HSBC was the sole lead manager and sole bookrunner. This was the first corporate 'Sukuk' and first public issuance in Saudi Arabia.

It was also the first structure to be approved by a Saudi Syariah board for distribution in the Kingdom, as well as being the first tradeable capital market instrument in the country and the first to be cleared through the Saudi Stock Exchange. This issuance is seen as "an important step in the development of Saudi Arabia's capital markets".

For "Best Project Finance House" Euromoney noted that in 2006 "HSBC Amanah was involved in four project finance transactions, each of which demonstrated the bank's product depth and innovation". Its most prominent deal was a US$600 million Islamic financing facility for the US$9.9 billion refinery developed by Saudi Aramco and Sumitomo Chemical in the city of Rabigh, Saudi Arabia.

The US$600 million Islamic finance facility for the Rabigh Refinery and Petrochemical Project was awarded the "Best Project Finance" deal. This financing was a pioneering transaction in the Kingdom of Saudi Arabia and has been used as a template for subsequent Islamic project financing.

According to Euromoney, "it was the largest transaction of its type to emerge from the Middle East and its structure also illustrated the growing integration of conventional and Islamic finance".

HSBC Amanah was the Islamic financial adviser to Saudi Aramco and Sumitomo Chemical for the deal.

In September 2006, HSBC Amanah was the joint lead manager in the launch of the first-ever exchangeable 'Sukuk' for Khazanah Nasional Berhad, named by Euromoney as the "Best Sukuk Deal".

The success of the issue has undoubtedly transformed the Islamic capital markets landscape. It has established the platform for Islamic Exchangeable securities and will serve as a benchmark for future Syariah compliant issues.

The transaction has also significantly deepened and broadened the Islamic capital markets, and bridged the Islamic and conventional investor bases. -- Courtesy of Borneo Bulletin

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