UK To Be First Non-Muslim Nation To Issue Sukuk - (Archive)

Britain plans to sell £200 million (RM1.08 billion) of Islamic bonds in the coming weeks as it seeks to become the first non-Muslim nation to issue the debt, reports the Rakyat Post.

The sale, subject to market conditions, will build on efforts to make Britain the hub of Islamic and Chinese finance, Chancellor of the Exchequer George Osborne said in his annual Mansion House speech in London yesterday.

Investor returns on the sukuk, which are the Islamic equivalent of a bond, will be “broadly equivalent” to that on conventional UK government debt of similar maturity, according to the Treasury.

Prime Minister David Cameron announced the plan to sell securities that comply with Islam’s ban on interest on Oct 29.

The sukuk will help London establish itself as a global capital for Islamic finance alongside Dubai and Kuala Lumpur, Cameron said in a speech at the time.

The industry is growing 17% a year and may be valued at US$2.67 trillion (RM8.56 trillion) by 2017, according to PricewaterhouseCoopers LLP.

Proceeds from the sukuk, to be sold by a special purpose vehicle, will go toward buying a 99-year head-lease on three central government properties and land legally owned by the Department for Communities and Local Government but occupied by other government departments, the Treasury said.

The UK chose HSBC Holdings plc to arrange and advise on its debut Islamic bond issue and Linklaters LLP to provide legal advice, the Treasury said in January.