| DUBAI, April 15
DUBAI, April 15 Hong Kong's government plans to
issue as much as US$1 billion worth of Islamic bonds later this
year, a spokesperson for its central bank said, suggesting the
territory's debut sukuk issue might be larger than initially
Lawmakers in Hong Kong passed a bill last month that will
allow the AAA-rated government to issue sukuk for the first
time. A report by the territory's Legislative Council indicated
the size would be around $500 million.
But a spokesperson for the Hong Kong Monetary Authority,
responding in an email on Tuesday to questions from Reuters,
said the preliminary plan was for a U.S. dollar-denominated
issue of at least $500 million and maybe as much as $1 billion.
"The sukuk is expected to be launched after the summer
holidays," the spokesperson said; this would imply an issue as
soon as September.
Details of the plan are subject to confirmation but the
sukuk are expected to have a maturity of five years or below and
use the ijara structure, a common sale and lease-back format in
Islamic finance, the spokesperson added.
The sukuk, aimed at international institutional investors
such as central banks, sovereign wealth funds, and pension and
other funds, would use state-owned properties in commercial
premises as their underlying assets. They would be listed in
Hong Kong and some other major Islamic centres, the HKMA said.
A debut sukuk from Hong Kong would boost its Islamic finance
credentials and help position the territory as a gateway between
mainland China and investors in the Gulf and southeast Asia, the
two main centres for Islamic finance.
Other conventional banking centres are also seeking to
burnish their Islamic credentials with debut sovereign sukuk
issues. Prime Minister David Cameron said last year that Britain
intended to issue sukuk worth around 200 million pounds ($335
million), while Luxembourg envisages a roughly 200 million
euro($275 million) issue.
Both issues could come as soon as this year, but Hong Kong
appears to be ahead of the other two centres in its technical
preparations for the sale.
($1 = 0.5976 British Pounds)
($1 = 0.7238 Euros)
(Editing by Alison Williams)