Morgan Lewis advises the FWU Group

The law firm Morgan Lewis, which opened its Dubai office in August 2013, announced that it has advised European-based multinational insurance group, FWU Group on the initial USD20 million tranche of their USD100 million Sukuk al-Wakala programme. This represents the first time an Islamic bond structure has been deployed on a block of life insurance policy contracts. The Sukuk will fund, in a fully Shari’ah-compliant manner, a set of ReTakaful (re-insurance) transactions for one of FWU’s five main subsidiaries, Atlanticlux. 

This transaction is a securitisation of Takaful insurance policies and provides an opportunity for investors to participate and invest in Sukuk certificates backed by FWU subsidiary, Lebensversicherung S.A. (‘Atlanticlux’), a BBB rated, multinational insurance provider. 

Ayman Khaleq, Dubai based partner in Morgan Lewis’ Banking & Finance practice, acted as lead counsel to the transaction and was supported by associate, Amanjit Fagura, London based Banking & Finance partners, Bruce Johnston and Lewis Jones provided English law opinion. 

The Sukuk has been assigned an investment grade credit rating by Fitch and will be issued in amortising tranches, each with a term of five years, and an average life of approximately 2.5 years. Distributions will be made quarterly to investors on a fully amortising basis and the profit rate is expected to be 7.00 per cent per annum. 

The Sukuk sponsor, FWU, is a European based financial services group which offers unit-linked life and annuity assurance products, with operations across Europe, the Middle East and Asia. The Sukuk is asset-backed, representing a true ring-fencing of assets, and the amount raised will be used to fund sales commissions on unit-linked life insurance policies. 

Bedell Cristin Guernsey Partnership acted as Guernsey counsel to the Issue and Issuer and Amanie Advisors acted as Shari’ah advisors to FWU.