Linklaters advises on the first sukuk issued under United States law
Leading global law firm Linklaters LLP was appointed to advise University Bank on its sukuk issuance in the United States. This is believed to be the first sukuk to be governed by the laws of the United States, in this case, the laws of the State of New York.
The U.S. dollar-denominated Shariah compliant perpetual sukuk issuance is intended to be recognised as Basel III-compliant, Additional Tier 1 capital by U.S. regulators, and is believed to be the first sukuk to be included within the Additional Tier 1 capital resources of a bank in the United States. The sukuk is limited to an annual profit rate of 5.75% and has no maturity date.
University Bank (a subsidiary of University Bancorp Inc.) is a community bank headquartered in Ann Arbor, Michigan which specialises in Islamic banking and mortgage subservicing for the credit union industry.
The transaction represents a significant chapter in the evolution of sukuk. This is the ninth publicly announced Additional Tier 1 capital sukuk, and Linklaters has advised on all nine issues.