The Role of Sukuk in Islamic Capital Markets
50
3.3.4 NON-OIC COUNTRIES
In 2014, the UK became the first government from the West to tap the sukuk market. Since
then, other non-OIC countries (e.g. France and Luxembourg) have joined the ranks in making
tax-related adjustments in support of sukuk issuance. The rationale behind these sukuk
issuances is to provide financial intermediation and support to the Islamic financial services
industry, as a complementary activity to their existing positions as international hubs in their
respective jurisdictions. Table 3.3 gives a snapshot of sovereign ijarah sukuk issued by
selected non-OIC countries. Meanwhile, Figure 3.5 illustrates the ijarah sukuk structure used
in the UK’s sovereign sukuk issuance.
Table 3.3: A Snapshot of Sovereign Ijarah Sukuk Issuances by Selected Non-OIC Countries
United Kingdom Luxembourg Saxony Anhalt
(Germany)
Sukuk issuer HM Treasury UK
sovereign sukuk PLC
Luxembourg Treasury
Securities SA
Stichting Sachsen-
Anhalt Trust
Originator Government of United
Kingdom
Grand Duchy of
Luxembourg
Federal State of Saxony-
Anhalt (through the
Ministry of Finance)
Currency
format
Pound Euro Euro
Structure Ijarah Ijarah Ijarah
Obligor/sukuk
rating(s)
Unrated AAA (S&P), Aaa
(Moodys)
AAA (Fitch), AA-
(Standard & Poor’s)
Sukuk assets Government buildings
and land
Government buildings
and land
Specific buildings
owned by the Ministry
of Finance
Purpose Proceeds from the sukuk
paid for the premium for
the 99-year lease on the
premises
To finance government
spending
General budgetary
purposes
Issuance date 2 July 2014 7 October 2014 August 2004
Tenure 5 years 5 years 5 years
Maturity 22 July 2019 7 October 2019 August 2009
Amount GBP200 million EUR200 million EUR100 million
Period
distribution
2.036% 0.436% 6-month EURIBOR + 1
bps
Listing London Stock Exchange Luxembourg Stock
Exchange
Geographical
distribution of
investors
Middle East, Asia and
Britain
n/a n/a
Sources: Offering Circular of HM Treasury UK sovereign sukuk PLC, Prospectus of Luxembourg Treasury Securities
SA, Structure Document of Stichting Sachsen-Anhalt Trust