Hong Kong has raised US$1 billion by issuing its first sovereign Islamic bonds, attracting orders for 4.7 times the amount on offer.
According to a statement on the government’s website, the dollar-denominated five-year notes were priced at a 2.005% profit rate.
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The sukuk was priced at 23 basis points above similar-maturity US Treasuries, the narrowest spread ever achieved on a benchmark dollar issuance from an Asian government outside Japan.
The deal attracted interest from a diverse group of conventional and Islamic investors. The Sukuk was allocated to over 120 global institutional investors, with 36% of the Sukuk distributed to the Middle East, 47% to Asia, 6% to Europe and 11% to the US.
By investor type, 11% was distributed to fund managers, 56% to banks and private banks, 30% to sovereign wealth funds, central banks and supranationals, and 3% to insurance companies, the statement said.
The Sukuk issuance comes after the legislative changes made in Hong Kong in July 2013, which provide a taxation framework for sukuk issuances comparable to that for issuances of conventional bonds.
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By GlobalData
