Sukuk Structuring, Risk and Syndication

Dates: 7^th - 9^th August 2023

COURSE INTRODUCTION

The Sukuk market has evolved significantly in the last 25 years. New and exciting structures have emerged to address the economic and financial interests of both Sukuk originators as well as Sukuk investors. Furthermore, increasingly advanced methods are being used to raise Sukuk capital for issuers, most notably, deal syndication, which is growing in popularity.

However, a tension continues to exist between the interests of originators and those of investors concerning the application of Shariah principles. To satisfy market demand, many Sukuk instruments are structured to provide cash returns resembling conventional products. Some financial obligations within these structures may not only compromise a stricter application of Shariah principles, but impact Sukuk risks in ways that are generally less well understood.

This course provides delegates with an invaluable opportunity to understand how Sukuk products are structured, how risks arise in Sukuk, and how Sukuk are syndicated. Delegates will also learn how, and why, Sukuk are viewed differently by various important stake holders in the Sukuk market, for example ratings analysts, investors, and origination teams.

The course will include a high level of interactive discussion, analysis of case studies, and thorough instruction in the treatment of Sukuk for structuring, risk management and syndication purposes. Knowledge gained from the course is directly applicable in practice.

Key Highlights and Learning Outcomes:
- Understand the essentials of Sukuk structuring principles
- Assess how Sukuk structuring principles are applied using real-life case studies
- Understand how risks arise in Sukuk and how these risks are mitigated in practice
- Learn how Sukuk are syndicated

Fee

Fee per participant: RM2,500/$725

Discounts are available for group bookings. Please contact us for more details.

In-house/group training

If you are looking for an in-house training program or wish to send a group to an existing public program, kindly please contact Andrew Tebbutt at [email protected] or +603 2162 7802.
Learn More

For enquiries please contact:

Normariya Sariman
Account Manager, REDmoney Seminars
[email protected]
Direct Line: +603 2162 7800 ext 44

Ramesh Kalimuthu
Events Sales Director
[email protected]
Direct Line: +603 2162 7800 ext 65
Fax: +603 2162 7810

For sponsorship & speaking opportunities:

Andrew Tebbutt
Managing Director
[email protected]
Direct Line: +603 2162 7802

For marketing and media enquiries

Govina Selvanthran
Marketing Manager
[email protected]
Direct Line: +603 2162 7800 ext 22

Sukuk Structuring, Risk and Syndication
A Three-Part, Online Course

Date: 7^th - 9^th August 2023

7.00am - 10.00am
UK

10.00am - 1.00pm
UAE

2.00pm - 5.00pm
Singapore/KL

COURSE INTRODUCTION

Key Highlights and Learning Outcomes:
- Understand the essentials of Sukuk structuring principles
- Assess how Sukuk structuring principles are applied using real-life case studies
- Understand how risks arise in Sukuk and how these risks are mitigated in practice
- Learn how Sukuk are syndicated

WHO WILL BENEFIT?

This course is designed to be of most benefit to:
- Chief financial officers, heads of finance and finance officers
- Chief risk officers, risk managers, and risk analysts
- Treasurers and treasury managers
- Compliance and audit professionals
- Capital market transaction origination and structuring teams
- Fixed income portfolio and other fund managers
- Ratings agency analysts
- Regulators

Program Format

This three-part training program will be delivered online through a stable, secure and free-to-access platform. The program itself will be delivered through lectures, worked examples and case studies in order to ensure a detailed and practical understanding of the program content. Participants will have plenty of opportunity to ask questions and interact with the program director. Login details and program materials will be sent to participants upon receipt of payment

Fee

Fee per participant: RM2,500/$725

Discounts are available for group bookings. Please contact us for more details.

In-house/group training

If you are looking for an in-house training program or wish to send a group to an existing public program, kindly please contact Andrew Tebbutt at [email protected] or +603 2162 7802.
Learn More

AGENDA AND FORMAT

Each session will be interactive in a seminar format, with participants encouraged to engage with questions throughout.

PLATFORM

AGENDA

Course duration is nine hours divided into three hours each session.

Day 1

Structuring and Origination

Overview of Sukuk
- What Sukuk are and what Sukuk are not
- How are Sukuk different to conventional bonds?
- Can Sukuk be traded? If so, what are the Shariah requirements?
- Are Sukuk on- or off-balance sheet?
  - Asset-backed Sukuk
  - Asset-based Sukuk

Sukuk Origination
- Securitization process based on type of underlying financial instrument
- Fair valuation of Sukuk in the context of market demand and supply
- Portfolio selection: how to choose underlying assets
  - Investor demand
  - De-risking the originator’s balance sheet
  - Tradability requirements

Sukuk Structuring
- Performance enhancements
  - Irrevocable commitment to repurchase at maturity
  - Liquidity facility
  - Third party guarantees
- Flexibility
  - Embedded call and put options
  - Rate resets and break clauses
- Risk reduction
  - Excess Spread
  - Over-collateralization and tranching
  - Role of Takaful
- Pre-funding of Sukuk coupons

Case Studies:
Several real-life examples of Sukuk will be used to explain how the structuring concepts related to performance enhancement, flexibility, and risk reduction are applied to actual Sukuk issuances.

Day 2

Risk Management

Risks Arising in Sukuk: For the Investor
- Murabahah Sukuk
- Salam Sukuk
- Ijarah Sukuk
- Istisnah Sukuk
- Mudarabah Sukuk
- Musharakah Sukuk

Risks Arising in Sukuk: For the Originator
- Market liquidity risk in traded Sukuk
- Funding liquidity risk and MTN programs which use Sukuk for Balance Sheet funding
- Liquidity facility: is it necessary?

Other Types of Risks in Sukuk
- Shariah non-compliance risk
- Accounting and de-recognition risks
- Operational risk
- Project completion risk
- Business risk

Capital Charges for Sukuk Instruments

Day 3

Sukuk Syndication

Overview of Syndication
- What is syndication and what is its purpose?
- What is the process of syndication?
- What are the motivations of syndicate members?
  - Access to capital
  - Balance sheet management
  - Fee income generation
- What are the risks involved in syndication?
- Why is the syndication of Sukuk issuances growing in popularity?

Sukuk Syndication Transaction Structures
- Role of the Lead Arranger prior to disbursement of funds
- Key functions of the Lead Arranger
  - Appointing other banks to participate in the syndicate
  - Carrying out due diligence on the issuer
  - Sukuk structuring: matching the issuer’s requirements to investors’ risk appetite
- Role of the agent bank after the disbursement of funds
- Types of deals: Underwritten versus “Best efforts”

Documentation
- Important considerations: accuracy; consistency; legal enforceability
- Key documents:
  - Mandate letter
  - Inter-creditor agreement
  - Information memorandum
  - Covenants

Case Studies:
Several real-life deal examples will be used to illustrate and further explain how Sukuk are syndicated in practice.

EXPERT COURSE DIRECTOR

Dr Ken Baldwin
Former Director, Financial Policies & Planning, Islamic Development Bank

Dr. Ken Baldwin has worked as a practitioner in banking and finance for over 25 years in senior positions spanning the front and middle offices. Having graduated from Oxford University with a first-class honors degree in Physics in 1989, he qualified as a Chartered Accountant with PWC, before joining UBS, and then later Credit Suisse, in derivatives risk and control functions based in London.

He gained a PhD in microeconomics, and worked in the GCC for 15 years in retail and investment banks. Whilst at Abu Dhabi Islamic Bank, Dr. Ken built an ALM analytic technology platform capable of capturing liquidity and interest rate risks inherent in the many varied financing products used at retail and corporate levels. He then moved to take up the position of MENA Regional Head of Quantitative Analysis for Citigroup. At Citicorp, Dr. Ken worked on structuring complex derivatives products used by Gulf-regional corporations to hedge FX and interest rate risks. Still residing in Bahrain, Dr. Ken then joined Investcorp, where he worked on the risk due diligence of corporate private equity and real estate private equity transactions and portfolio management. After leaving Investcorp, he set up the risk management department for venture capital bank, providing Basel III compliance and deal analysis for the bank. He then operationalized a new Islamic investment bank as its Chief Operating Officer for 3 years, before his most recent industry role at the Islamic Development Bank, where he set up and ran a new department tasked with developing financial policies and risk-based pricing of the bank’s Islamic financing products. Dr. Ken is currently an Assistant Professor of Finance in the UK. He has published quantitative finance articles in peer-reviewed academic journals including the Journal of International Financial Markets Institutions and Money, and the Journal of Risk, and during his earlier career, taught CFA and FRM professional certifications as a pastime for the Bahrain Institute of Banking and Finance.