Islamic Finance

UK lines up sophomore sovereign sukuk for first half of 2021: HM Treasury

LONDON - The government of the United Kingdom plans to issue its second sovereign sukuk during the first half of 2021, according to a UK Treasury spokesperson.

“Further announcements, including on the precise timing and size of issuance, will be communicated in due course,” the spokesperson said in an email to Salaam Gateway on Wednesday (March 3).

The spokesperson declined to comment on potential arrangers involved in the upcoming issuance.

News of a new sukuk issuance came as Chancellor Rishi Sunak unveiled the government’s 2021 budget on Wednesday. The budget includes plans for a debut sovereign green bond as well as a Green retail National Savings and Investment (NS&I) product.

The UK’s second sovereign sukuk was originally planned for early 2020 prior to the COVID-19 pandemic. But a deal has yet to 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.

Great Britain sold its first-ever sovereign sukuk in June 2014.

The deal consisted of a five-year £200 million ijarah sukuk and 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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