International Innovative Technologies

International Borrowers Take to Islamic Bond Market

Until recently the issuance of Islamic bonds, or sukuk, was confined to the Muslim world. But now a number of international borrowers are tapping the markets, including Nomura Holdings in Japan and Europe's first corporate borrower, International Innovative Technologies.
The ratings agencies Moody’s and Standard & Poor’s say they expect to see a rise in the number of sukuk issues by new players over the next 12 months, including issues by borrowers in Singapore, Australia, Luxembourg, Thailand, Hong Kong, France and Russia.
While the Islamic Financial Service Board and the accounting and auditing organization have defined standards for sukuk, defaults over the past year have shown that new guidelines must be set as problems arise, particularly as sukuk start to generate global attention.

IIT debut sukuk in UK may lead to spate of new issuances

The recent launching of the first corporate Sukuk out of the UK by Gateshead-based International Innovative Technologies (IIT) may have taken the Islamic capital markets by surprise, but the signs are that a spate of other UK originations may follow over the next few months. A major GCC-based sukuk arranger confirmed that it has been working on a corporate sukuk issuance for a UK healthcare company for the last year. The company hopes to launch the issuance next month. A London-based Islamic bank is also working on a sukuk issuance for a UK client which is near to being finalized. Tom Wilkinson, chairman of IIT, is confident that there is potential for other UK companies to access Islamic finance including sukuk as an alternative source of funding. The proceeds of the IIT sukuk, according to Wilkinson, will be used as growth capital for the company. The sukuk issue was placed privately with Millennium Private Equity Ltd., leading private equity firm based in the Dubai International Financial Centre (DIFC) and regulated by Dubai Financial Services Authority (DFSA). Millennium Private Equity Ltd. is co-owned by United Gulf Bank (UGB) and Dubai Islamic Bank (DIB).

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