Britain set to become first western nation to issue a sovereign Islamic bond

Britain set to become first western nation to issue a sovereign Islamic bond

The UK will become the first country outside the Islamic world to issue sovereign Sukuk, the Islamic equivalent of a bond, the Chancellor has announced. In the next few weeks, subject to market conditions, the government intends to issue £200m sterling Sukuk, the largest ever issuance of sterling Sukuk.

The UK sovereign Sukuk will have a maturity of five years and use the Al-Ijara structure, the most common structure for sovereign Sukuk. The Sukuk will be underpinned by rental income from three central government office properties, which will remain in government ownership during the lifetime of the Sukuk.

A syndicate of Joint Lead Managers have been appointed to deliver the planned sale of UK sovereign Sukuk. They are:

  • HSBC
  • Barwa Bank
  • CIMB
  • National Bank of Abu Dhabi, and
  • Standard Chartered

Further details will be announced in due course by the syndicate banks and the Debt Management Office, acting on behalf of HM Treasury.

First published on LexisPSL Banking & Finance. Click here for a free trial. 

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About the author:

Neil specialises in banking and asset finance transactions with a particular emphasis on shipping finance, aviation finance, renewable energy finance and in providing corporate finance transactional support. Neil qualified as a solicitor with TLT in 2004 and worked as a finance solicitor in both the Bristol and London offices before joining the asset finance team at DLA Piper.