Jordan’s first sovereign issue of sukuk coming up soon

AMMAN –– Jordan will soon launch its first sovereign issue of Islamic bonds, sukuk, to finance real estate projects, Finance Minister Umayya Toukan said Monday. 

Toukan, speaking at a meeting for Prime Minister Abdullah Ensour with chief editors of daily newspapers and economic journalists, did not give details on the size of the planned Islamic Sharia-compliant issuance, but informed sources indicated that the sovereign sukuk could raise around JD400 million. 

The source said the government may enter the Islamic financial market in the coming few weeks, adding that Islamic banks in Jordan enjoy liquidity in excess of JD1.4 billion. 

Tapping the sukuk market by the government, the source said, would also encourage more corporate sukuk issues. 

Jordan's only private sector sukuk issuance was issued by Al Rajhi Cement for JD85 million in 2011. 

In 2012,  Parliament passed the Islamic Finance Sukuk Law to allow both public and private entities to issue Islamic bonds in dinars and in foreign currencies. 

In April of this year, the government chose the Islamic Corporation for the Development of the Private Sector, an arm of the Jeddah-based Islamic Development Bank, to support the country's debut for the planned domestic sukuk offering. 

The sukuk issuance will be a dinar-dominated offering.