A Beginner’s Guide to Structuring Sukuk (Video)
At the World Islamic Economic Forum in London yesterday, British Prime Minister David Cameron unveiled plans to issue £200m in Islamic bonds, also known as sukuk. The British government wants London to be an international center of the fast-growing Islamic finance industry, which is forecast to top £1.3 trillion by next year, and with this issue, Britain will become the first non-Muslim country to offer sukuk.
The move is timely. Global sukuk issues have jumped 50%, from about $92 billion in 2011 to $138 billion in 2012, according to a recent report by International Islamic Financial Market (IIFM), a Bahrain-based standard setter in Islamic finance.
Increasingly described as the instrument of choice of the Islamic finance industry, sukuk have also been used by some unexpected entities in the Western world, including the German state of Saxony-Anhalt, GE Capital, and Tesco.
In the short video above, Richard T. de Belder, a lawyer well versed in structuring sukuk, discusses:
- What are sukuk?
- A basic structure underlying sukuk
- Some drivers and issues
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