The British government is planning to issue five-year £200 million sterling Sukuk in the coming weeks as it seeks to become the first country outside the Islamic world to issue sovereign Sukuk.
Subject to market conditions, the sovereign sukuk will use an ijara structure, a sharia-compliant sale and lease-back contract, allowing the rental income of three central government offices to underpin the transaction.
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The sukuk, an Islamic equivalent of a bond, will help Britain’s Islamic banks to help manage their short-term liquidity needs as well as establish London as a global capital for Islamic finance.
The UK has selected HSBC Holdings in January to deliver the planned sale of sovereign Sukuk.
Additionally, the government has also appointed Barwa Bank, CIMB Group Holdings Berhad, National Bank of Abu Dhabi and Standard Chartered Plc as joint lead managers.
Further details on the sale will be declared in due course by the syndicate banks and the Debt Management Office that acts on behalf of HM Treasury.
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