The International Islamic Financial Market (IIFM) has endorsed Solidarity Trust Services’ $300 million Islamic Sukuk issue guaranteed by The Islamic Development Bank (IDB).
The endorsement comes in line with the IIFM's aim to develop the Islamic capital market and to ensure the harmonization and standardization of Islamic financial products so as to achieve global appeal and acceptance.
The issue is a combination of securitization of ijarah, murarabah and Istisna contracts with a minimum of 51 percent on the Ijara assets. It is the first international Islamic Sukuk issue by a non-sovereign entity.
The Islamic Development Bank (IDB) is a multilateral development finance institution, which has been a strong supporter of the development of Islamic capital and a keen advocate of its success. The issue is a benchmark for future issues by other financial institutions and OIC member countries.
The Solidarity Trust Services Limited (STSL), a special purpose company incorporated in Jersey Channel Islands will issue the trust certificates whereas the Islamic Corporation for the Development of Private Sector (ICD) will play an intermediary role by purchasing the asset from IDB and selling it to STSL at the consolidated net asset value. The certificate holders will be entitled to receive periodic profit distribution. The Citigroup Global Markets acts as the lead arranger and the market-maker for the issue
Bahrain-based IIFM was established in 2002 through a multilateral effort. The main mission of the IIFM is to create an environment that would encourage active trading of Shari'a-compatible instruments among Muslim countries and among Islamic and conventional financial institutions. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
