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Britain mandates banks for maiden sovereign sukuk "in coming weeks"

Published on Jun 13, 2014 10:01 AM

(Reuters) - The British government has mandated banks to arrange a five-year 200 million pound (S$420.6 million) sukuk - the world's first Islamic bond to be issued by a Western sovereign.

The bond could be issued in the coming weeks, subject to market conditions, The Treasury said in a statement late on Thursday. This would place the issuance ahead of the Muslim holy month of Ramadan which starts at the end of June.

A sovereign sukuk is the centrepiece of Prime Minister David Cameron's bid to position London as a leading hub for Islamic finance, as competition heats up with financial centres in the Middle East and Asia.

The bond would be issued before similar transactions planned by Luxembourg, Hong Kong and South Africa, all keen to diversify their funding sources and tap liquidity provided by increasingly wealthy Islamic investors.

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