Luxembourg’s long awaited Sukuk issued on less than stellar demand

Luxembourg’s Sukuk represents the first ever European Monetary Union Sovereign to issue Sukuk. The order book being only twice over subscribed indicates less than stellar demand and is to be contrasted to the UK’s recent Sovereign which was ten times over subscribed.

HSBC and BNP Paribas acted as the Joint Structuring Advisors/Joint Bookrunners and Banque Internationale Luxembourg and QInvest as co-lead managers for the Sukuk issue. HSBC also acted as Coordinator.

Banks took 40 percent of the issue, highlighting the growing appetite for high-rated listed sukuk that can qualify for use by Islamic banks to help meet their capital adequacy requirements. By geographic distribution, 61 percent of the issue was allocated to investors from the Middle East, while European investors took 20 percent and Asia 19 percent.

The Sukuk will be listed and admitted to trading on the Euro MTF market of the Luxembourg Stock Exchange (LuxSE).

Full details of the Sukuk can be found in our Sukuk profile section here.