FWU, which offers takaful (Islamic insurance) solutions, used a structure known as wakala. The sukuk is the first tranche of a $100 million programme rated BBB- by Fitch, and arranged by EIIB-Rasmala, a venture between London-based European Islamic Investment Bank and Dubai's Rasmala Group.
In a wakala sukuk, certificates are issued by an originator to buy assets which are given to an agent for management; the agent charges a fee for his services and the originator undertakes to buy the assets on maturity at an agreed price.
"Sukuk will benefit from moving to asset-backed structures, so ring-fencing and recourse to the underlying assets is important," said Harris Irfan, managing director at EIIB.
"It is fair to say the spirit of sharia-compliant financing is not merely about replicating conventional financing, rather it is about forging a new path - making a connection with the real economy."
The wakala format used by FWU is flexible enough for other Western issuers to consider tapping the sukuk market, as long as they can identify a set of assets, he said. "Anything with a regular income stream - it could be a utility or a toll-road - any asset which you can ring-fence."
Proceeds of FWU's sukuk, which carries a profit rate of 7 percent, will be used to fund a set of re-takaful transactions for its Luxembourg-based unit Atlanticlux, which is the ultimate obligor under the programme.
The assets for the transaction are the beneficial rights of insurance policies; ownership is transferred to a Guernsey-based company which is in turn managed by AON PLC, which acts as the agent.
Last December, FWU issued a $55 million seven-year sukuk through a private placement that was backed by intellectual property rights. That sukuk, its first, was based on the principle of ijara, an Islamic sale and lease-back contract.