Dubai International Financial Center In USD700m Sukuk Issue
by Lorys Charalambous, Lowtax.net, Cyprus
30 September, 2014
The Dubai International Financial Centre (DIFC), a free zone in the United Arab Emirates (UAE), has revealed that it will issue USD700m worth of Islamic bonds, known as sukuk, by the end of this month.
Eisa Kazim, Governor of DIFC, said that revenue from the issuance will be used to refinance USD650m of debt and develop infrastructure.
Sukuk investment structures are Shari'ah-compliant alternatives to interest-bearing investment certificates or fixed-income securities. They offer Islamic investors a means of subscribing to certificates that represent a right to receive a share of profits generated by an underlying asset base, with added benefit of being tradable on the secondary market. The receipt or payment of interest is precluded under Shari'ah law.
Earlier this month Hong Kong and South Africa launched their first sukuk offerings, raising USD1bn and USD500m, respectively.
DIFC's sukuk will be based on the ijara structure, but the tenor has not been decided yet.
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