Wednesday, 18 August 2010

Appeal of sukuk spreads beyond strongholds

Malaysia and the Gulf have been the traditional strongholds of Islamic bond issuance, but the market is beginning to broaden to other countries, Muslim and otherwise.

On Monday Norton Rose, the law firm, revealed it had advised on a $10m mini-issue by International Innovative Technologies, a maker of industrial milling machines in north-east England. It raised $10m from Millennium Private Equity, based in Dubai.

Millennium will be the sole investor in the sukuk, which will be listed on the Cayman Islands Stock Exchange. The sukuk will pay 10 per cent a year and expire in 2014. It uses a musharaka structure, also known as profit and loss sharing, allowing Millennium an option to take a stake in IIT.

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