DUBAI Oct 17 Jordan's government has raised 34
million dinars ($47.9 million) in its first issue of a local
currency sukuk for its own funding purposes, a deal that will
benefit the country's Islamic banks, the government said on
The Islamic bonds, which use a common sale and lease-back
format known as ijara, have a tenor of five years and an
expected profit rate of 3.01 percent.
Jordanian finance minister Omar Malhas said the issue, which
was more than three times subscribed, priced inside the
country's conventional bond curve - a sign of strong demand.
"The sovereign issuance is of great significance for the
kingdom's four full-fledged Islamic banks, because it will give
them a badly needed tool to manage their excess liquidity,
estimated to be 1.4 billion dinars," he said in a statement.
The issue was conducted with help from the Islamic
Corporation for the Development of the Private Sector, an
affiliate of the Jeddah-based Islamic Development Bank, which
said Jordan would now be able to conduct more sukuk sales on its
own using the same documentation.
Jordan has a small but growing Islamic finance industry. In
2011, the local company Al-Rajhi Cement issued 85 million dinars
of seven-year sukuk, the first Islamic bonds in the country.
In May this year, the central bank said it had auctioned its
first sukuk, a five-year, 75 million dinar deal to help finance
purchases by state utility firm National Electric Power Company.
(Reporting by Andrew Torchia, editing by Larry King)