Hong Kong: Japan will issue its first sovereign Islamic bond, or sukuk, of $300-500 million in Malaysia next month, a senior official of the Japan Bank for International Co-operation (JBIC) has said.
“It will be issued after the Chinese New Year (on 7 February) and we hope it will be well-subscribed by the Gulf states,” said Tadashi Maeda, JBIC director-general for energy and natural resources finance department, here yesterday (15 January).
The government-backed JBIC is Japan’s biggest overseas lender.
The issue, the first by an institution from a major economy to tap capital from the oil-rich Muslim Gulf states, comes at a time when oil prices have soared to record highs.
Details of the issuance will be finalized close to a 23 February Islamic finance seminar in Japan to which Dr Zeti Akhtar Aziz, the governor of Malaysia’s central bank, Bank Negara Malaysia, has been invited to make an address, Maeda said.
“We will finalize it around that time. We have studied this for a long time, as this is the first sovereign Islamic bond to be issued by Japan,” he said on the sidelines of a two-day Islamic finance seminar here organized by the Hong Kong Monetary Authority and the Malaysia-based Islamic Fi nancial Services Board (IFSB).
Maeda said the bond will have a maturity of five to seven years.
Malaysia, a pioneer in Islamic finance with three decades of history, is the world’s biggest sukuk issuance centre with over $56 billion, or 62% of global sukuk issues.