Hong Kong Monetary Authority (HKMA) has reportedly selected HSBC, Standard Chartered, CIMB Group Holdings and National Bank of Abu Dhabi to launch its first Islamic bond.
The new Islamic bond issue is expected to be launched in September this year, according to International Financing Review (IFR).
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Peter Pang, HKMA deputy chief executive said that the sukuk, which is expected to raise between US$500 million and US$1 billion, will be targeted at global institutional investors.
Based on the Ijarah structure, the Hong Kong government sukuk have a tenor of five years and will as a serve as a gateway between investors in the Middle East and South-East Asia and China.
HKMA will join forces with Hong Kong government to issue the new bond from the HK government’s HKD200 billion (US$25.8bn) bond programme.
The sukuk will be listed in Hong Kong as well as other major Islamic finance centres.
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By GlobalDataIn March 2014, Hong Kong lawmakers have passed a tax bill to allow for sukuk sales.
"With the tax framework for sukuk in place, Hong Kong’s financial platform is ready for sukuk issuance," Pang added.
