Sharjah Islamic Bank, based in the United Arab Emirates, plans to offer its first sukuk issue, a type of Islamic bond, a market source said on Tuesday. HSBC is the sole bookrunner and lead manager. The source gave no details on the size of the issue but said it was expected to have a floating rate payment and an "intermediate" maturity.
The deal would be launched, subject to market conditions, following investor presentations beginning in the week of September 11. Sukuk are better described as "trust certificates" or "participation securities" that give investors a stake in an asset along with a share in the cashflow and in the risk proportionate with such ownership.
Under Islamic or Shariah law, interest is banned and income must instead be derived from a fundamental economic transaction such as trade in goods and services, direct investment in a business or renting out a property.
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