United Kingdom Sukuk: 10 times over-subscribed

The U.K. raised 200 million pounds ($339 million) from the Sukuk sale, with investors bidding for more than 10 times the amount offered as the UK became the first non-Muslim sovereign issuer of Sukuk.

“We have seen very strong demand,” George Osborne, Chancellor of the Exchequer, said in a Treasury statement. “I hope that the success of this government issuance will encourage further private sector issuances of sukuk in the U.K.”

The Sukuk which is based on an Ijara sale and lease back contract was originally planned for issuance in 2008 but was shelved due to the financial crisis. Particular challenges faced in finding suitable government assets to back the sukuk in the Ijara sale, justified the relative small amount raised of £200 million according to Robert Stheeman, chief executive officer at the U.K. Debt Management Office, perhaps hinting at future challenges to raising larger sukuk for the UK Treasury.