UK-based Al-Rayan Bank has issued a
£250 million ($347 million) sukuk using a
residential mortgage-backed securitisation (RMBS). The
financial institution predicts this could be the start of a
raft of other Islamic banks entering the RMBS market.
It has appointed Standard Chartered to
arrange investor meetings ahead of the issue.
Moody’s has assigned a provisional Aaa rating for
the sukuk, which is said to have generated investor
interest from asset managers and fund managers globally,
notably, a number of Islamic banks based in the Middle East.
Early indications put pricing in the area of 80 basis points
over the 3 month London interbank offered rate.
The issuance is backed by a portfolio of home purchase plans
from clients in England and Wales, with loans set to mature in
2052. A special purpose vehicle will issue sukuk
certificates backed by these loans.
The sukuk securitises diminishing musharakah contracts with