King & Spalding advised Kuveyt Turk Katilim Bankasi A.S. (KTPB), a Turkish participation bank majority-owned by Kuwait Finance House, in the issuance of US$350 million certificates due 2016, listed on the London Stock Exchange. The certificates are the first-of-its-kind asset-backed certificates from Turkey, and the first certificates issued under newly revised Turkish legislation permitting such certificate issuance (known as rental certificates) through a Turkish incorporated special purpose vehicle. The certificates will be issued through KT Sukuk Varlik Kiralama A.S, a Turkish incorporated special purpose vehicle.

This is KTPB’s second issuance in the international debt market. The bank issued US$100 million in August 2010 through a Cayman Islands-incorporated special purpose vehicle, KT Sukuk Limited. That issuance also was listed on the London Stock Exchange.

“This is a landmark transaction,” said Rizwan H. Kanji, a debt capital markets partner in King & Spalding’s Middle East and Islamic finance practice in Dubai. “It not only is the first transaction to comply with the recently amended Turkish legislation, but also is the first asset-backed certificate from Turkey. This transaction should facilitate other potential Turkish issuers to tap the market in a similar manner.”

A Dubai-based King & Spalding debt capital markets team was involved in the KTPB transaction. It was led by Kanji with the assistance of senior associate Lidia Kamleh. In addition to Dubai, King & Spalding has Middle East offices in Riyadh (affiliate) and Abu Dhabi.

The joint lead managers on the transaction were Abu Dhabi Islamic Bank PJSC, Commerzbank A.G, HSBC, Liquidity Management House and Standard Chartered Bank.