Dubai: Luxembourg, which issued the first euro-denominated sukuk last month, plans to issue more such bonds to match the investor appetite, its finance minister said on Monday.
The €200 million (Dh930.5 million) sukuk issued in September was subscribed two times, of which 61 per cent was allocated to investors in the Middle East.
“The interest for our sukuk has been very high. We are looking into that possibility [issuing more sukuk] of doing it quiet keenly as we are encouraged for this. There seems to be a large appetite for sukuk around the world and Luxembourg considers this to be a very efficient way to diversify,” said Pierre Gramegna, Luxembourg’s minister of finance.
When asked about the size or the timeframe for the new sukuk, Gramegna said “It’s too early [to talk about the timeframe] as we just finished the first one. We wanted to get a feel of the appetite in the market and also explore ways and means to broaden the base that you use as an underlying asset that you use for sukuk.”
The AAA-rated sovereign priced the September sukuk at a profit rate of 0.436 per cent, with half of the sukuk placed with central banks and other official institutions.
“I’m glad to see the interest for our sukuk was quiet large and it was over-subscribed and we were able to collect investment mainly from the Middle East and other areas in Asia and Europe,” Gramegna said.
Luxembourg’s first issue of Sharia-compliant bonds followed debuts by non-Muslim countries and cities including the UK, South Africa and Hong Kong. Sales of debt that comply with Islam’s ban on interest have climbed by 13 per cent in 2014 to $37.8 billion (Dh138.83 billion), according to data compiled by Bloomberg
