Euroclear supports UK Government's first issue of an Islamic Bond
Brussels and London, 2 July 2014 - 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 support for the London market as it becomes the major Western hub for Islamic financing. EUI already holds GBP 1.3 trillion worth of gilts on behalf of clients, and these clients have the choice of holding balances in these Sukuk at EUI or Euroclear Bank, our sister international depository. Euroclear Bank has a strong history of providing post-trade expertise in sharia compliant debt – last year Euroclear Bank partnered with Borse Dubai to support asset servicing for our clients purchasing bonds on NASDAQ Dubai’s Sukuk trading platform.”
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About the Issue
Euroclear is one of the world’s largest providers of domestic and cross-border settlement and related services for bond, equity, ETF and mutual fund transactions. Euroclear is a proven, resilient capital market infrastructure committed to delivering risk-mitigation, automation and efficiency at scale for its global client franchise.
The Euroclear group includes Euroclear Bank - which is rated AA+ by Fitch Ratings and AA by Standard & Poor’s - as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland (see more below). The Euroclear group settled the equivalent of EUR 572 trillion in securities transactions in 2013, representing 170 million domestic and cross-border transactions, and held almost EUR 24.2 trillion in assets for clients.
Euroclear UK & Ireland is the central securities depository (CSD) of the United Kingdom, Jersey, Guernsey and the Isle of Man for all domestic securities, and of Ireland for equities. It provides advanced, low-cost settlement facilities for a wide range of investment funds, corporate and government securities, and equities including those traded on the London Stock Exchange and Irish Stock Exchange.