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Islamic Finance

UK announces arrangers for sophomore sovereign sukuk

LONDON - The Government of the United Kingdom has announced the syndicate of arranging banks for its second sovereign sukuk, according to a document on Monday (March 22) from the country’s Debt Management Office.

CIMB Investment Bank, Dubai Islamic Bank, Emirates NBD Capital, HSBC and Standard Chartered have been appointed as joint lead managers for the planned sale.

Joining them will be Bank ABC, Dukhan Bank, KFH Capital and Maybank as co-lead managers.

The sophomore sukuk will have a long five-year final maturity. It will be an ijarah sukuk, similar to the government’s first-ever sovereign issue in June 2014.

The sale is set to take place in the coming weeks, subject to market conditions, the document noted.

Earlier this month, a treasury spokesperson told Salaam Gateway that British authorities planned to issue the second sovereign sukuk in the first half of 2021.

Great Britain’s second sovereign sukuk was originally planned for early 2020 prior to the COVID-19 pandemic. However, a deal did not materialise.

In November 2019, the country’s debt management office hired HSBC as structuring advisor and Clifford Chance as legal advisor for the sovereign’s sukuk.

The UK’s debut sovereign sukuk consisted of a five-year £200 million ijarah paper that offered a profit rate of 2.036% in line with the yields on gilts (British government bonds) of a similar maturity.

Barwa Bank (now Dukhan Bank), CIMB Islamic, HSBC, National Bank of Abu Dhabi (now First Abu Dhabi Bank) and Standard Chartered arranged the deal.

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