2 July 2014 - Brussels and London, Euroclear UK & Ireland (EUI), the central securities depository for the United Kingdom, is co-operating with the Government’s Debt Management Office to bring to market the first ever UK Sovereign Sukuk bond. The United Kingdom becomes the first nation outside the Islamic world to bring such an instrument, which has been sold to both domestic UK and international investors. Primary issuance of this bond will occur at Euroclear Bank, the Brussels-based international central securities depository.
The Chancellor of the Exchequer George Osborne said: “This issuance of Britain’s first sovereign Sukuk delivers on the government’s commitment to become the western hub of Islamic finance and is part of our long term economic plan to make Britain the undisputed centre of the global financial system. We have seen very strong demand for the Sukuk, resulting in a price that delivers good value for money for the taxpayer. I hope that the success of this government issuance will encourage further private sector issuances of Sukuk in the UK.”
The GBP 200 million Sukuk bond, using a sale and lease-back structure, will be issued in Euroclear and will settle in EUI and Euroclear Bank, on 2 July 2014. It is listed on the London Stock Exchange. Maturing in 2019, the primary issuance was heavily over-subscribed.
John Trundle, Chief Executive Officer of Euroclear UK & Ireland, said: “We are delighted to provide an issuance, settlement and safekeeping service for this premier UK Government Sukuk bond. Today’s announcement reinforces our commitment to London as it cements itself as a major Western hub for Islamic financing. EUI already safekeeps GBP 1.3 trillion worth of gilts on behalf of clients, and furthermore, clients have the choice of holding balances in these Sukuk at EUI or Euroclear Bank, our sister international depository. Indeed, Euroclear Bank has a strong history of providing post-trade expertise for Shari ‘a compliant debt – as recently as last year we partnered with Borse Dubai to support asset servicing for our global client franchise purchasing bonds on NASDAQ Dubai’s Sukuk trading platform.”