Turkey launches its first sukuk
Turkey has entered the sukuk (Islamic bond) market first the first time, having previously only issued conventional bonds.
The $1.5bn sukuk was significantly over-subscribed, with the book size closing at over $8bn despite being sub-investment grade and offering a profit rate of approximately 2.80%.
Of particular interest is that Turkey’s sukuk is the first to be issued outside the two main regions of sukuk issuance, South-East Asia and the Gulf Co-operation Council.
Jason Kabel, head of Fixed Income at Bank of London and The Middle East, said: “It is encouraging that a country outside of South-East Asia or the GCC is issuing a Sukuk of this size in US dollars.
“The interest in this Sukuk demonstrates the huge demand for US denominated Sukuk in the international market. We expect to see more governments and institutions take advantage of this demand over the last quarter of 2012.”