Hong Kong $1 billion sukuk issue

Overview:

• The Government of the Hong Kong Special Administrative Region of the People’s Republic of China (HKSAR Government) has issued a $1 billion sukuk under the Government Bond Programme.
• The sukuk has a tenor of 10 years, and is the third dollar-denominated sukuk launched by the HKSAR Government, following issues in September 2014 and June 2015.
• The sukuk uses a wakalah structure, with one-third of assets underpinned by selected units in commercial properties in Hong Kong, and two-thirds of assets underpinned by shariah-compliant commodities.
• The Reg S dollar sukuk was priced at 3.132% and saw strong demand from global investors, attracting orders of $1.72 billion, which was 1.72 times the issuance size.
• The sukuk is issued by a special purpose vehicle, Hong Kong Sukuk 2017, established and wholly owned by the HKSAR Government and is listed on the Hong Kong Stock Exchange, Bursa Malaysia (Exempt Regime) and Nasdaq Dubai. 

Adam Majeed - Regional editor