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| No.5 October, 2014 |
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Hong Kong issues Islamic bond |
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 The Hong Kong Special Administrative Region Government announced the successful offering of its inaugural sukuk on September 11, 2014 under the Government Bond Programme.
The sukuk, with an issuance size of US$1 billion and a five-year tenor, marks the world's first USD-denominated sukuk originated by a AAA-rated government.
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The sukuk was priced on September 10 at 2.005%, 23 basis points over Five-year US Treasuries.
The Monetary Authority, which represents the Government in the offering, said the sukuk saw strong demand from global investors, attracting orders exceeding US$4.7 billion and allowing final pricing to tighten by seven basis points from its initial price guidance.
The sukuk was allocated to over 120 global institutional investors, with 36% of the sukuk distributed to the Middle East, 47% to Asia, 6% to Europe, and 11% to the US.
Financial Secretary John Tsang said the Government was pleased to see such strong demand for the inaugural sukuk, signifying an important milestone in the Islamic capital market’s development in Hong Kong.
He added that the success of this transaction demonstrates that issuance of sukuk using Hong Kong’s platform was a viable fund-raising option and widely accepted by investors around the world.
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