Brunei raises $70m from bonds Latest issue brings to $800m total generated from sale of sukuk
Friday, June 22, 2007
BRUNEI DARUSSALAM has raised $70 million from its latest sale of 91-day Islamic securities, bringing to $800 million the total raised from a programme to sell bonds began in April 2006.
The securities have a yield or rental rate of 2.275 per cent.
The latest sale is the seventh issuance of the Sukuk Al-Ijarah Securities.
With the consent of His Majesty the Sultan, the Ministry of Finance announced the successful pricing of the BND$70 million issue, which will carry a maturity of 91 days ending September 20.
In April, the government issued $70 million in 91-day Islamic securities at a yield of 2.700 per cent.
Brunei Darussalam began the Sukuk Al-Ijarah programme in April 2006.
Under this, the sultanate issues Islamic securities under a lease arrangement with the government.
The Sukuk Holding Properties Inc and Sukuk (Brunei) Inc were set up by the Ministry of Finance and registered under Brunei Darussalam's International Business Companies Order 2000 to act as conduits for the government to issue the sukuk or Islamic financial certificates.
The Government of Brunei through the Ministry of Development have registered government-owned assets to Sukuk Holding Properties Inc, which will then sell the beneficial rights to Sukuk (Brunei) Inc. The government will then lease back these assets from Sukuk Inc in return for lease rentals payments throughout the lease period. From there, the rental payments will be used for the payment of dividends to investors under the programme.
The Sukuk Al-Ijarah programme is one of the first steps taken by the sultanate to develop Brunei's capital markets based on Islamic principles, which ban the earning of interests. The move was seen as a bold statement with Brunei Darussalam being the first sovereign in the world to venture into capital development without previously setting up a conventional capital market.
According to the Ministry of Finance, Sukuk Al Ijarah is generally an alternative to conventional bonds. It is backed by the buying, selling and leasing of properties. It said the main distinction between sukuk and conventional bond, is that the Islamic bonds do not involve the payment of fixed interest rates, which is prohibited in Islam. The Brunei Times
The securities have a yield or rental rate of 2.275 per cent.
The latest sale is the seventh issuance of the Sukuk Al-Ijarah Securities.
With the consent of His Majesty the Sultan, the Ministry of Finance announced the successful pricing of the BND$70 million issue, which will carry a maturity of 91 days ending September 20.
In April, the government issued $70 million in 91-day Islamic securities at a yield of 2.700 per cent.
Brunei Darussalam began the Sukuk Al-Ijarah programme in April 2006.
Under this, the sultanate issues Islamic securities under a lease arrangement with the government.
The Sukuk Holding Properties Inc and Sukuk (Brunei) Inc were set up by the Ministry of Finance and registered under Brunei Darussalam's International Business Companies Order 2000 to act as conduits for the government to issue the sukuk or Islamic financial certificates.
The Government of Brunei through the Ministry of Development have registered government-owned assets to Sukuk Holding Properties Inc, which will then sell the beneficial rights to Sukuk (Brunei) Inc. The government will then lease back these assets from Sukuk Inc in return for lease rentals payments throughout the lease period. From there, the rental payments will be used for the payment of dividends to investors under the programme.
The Sukuk Al-Ijarah programme is one of the first steps taken by the sultanate to develop Brunei's capital markets based on Islamic principles, which ban the earning of interests. The move was seen as a bold statement with Brunei Darussalam being the first sovereign in the world to venture into capital development without previously setting up a conventional capital market.
According to the Ministry of Finance, Sukuk Al Ijarah is generally an alternative to conventional bonds. It is backed by the buying, selling and leasing of properties. It said the main distinction between sukuk and conventional bond, is that the Islamic bonds do not involve the payment of fixed interest rates, which is prohibited in Islam. The Brunei Times
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