Announced in late 2013, both the UK, and Luxembourg sovereign Sukuk are moving closer to issuance, with Luxembourg likely to pip the UK and become the first Western European (as well as the first non-Islamic) country to issue a Sovereign Sukuk.
The Luxembourg issuance seems at a far more advanced stage having already identified the assets to be used in an Ijara structure. In contrast the UK Treasury released the below Memorandum to Parliament providing a background on the Sukuk and its legal framework as a Sovereign issuance. The UK Treasury concluded in the memo “The Treasury continues to work on practicalities of raising money through alternative finance arrangements,” indicating issuance is far from imminent.
Luxembourg buildings of value EUR 200m to be used in Ijara structure
The sovereign Luxembourg sukuk will use three buildings, which will be transferred to a Luxembourg S.A. Special Purpose Vehicle (SPV) owned by the state of Luxembourg. The buildings include two towers situated at the Place de l’Europe in Kirchberg, and the Gutenberg building in Strassen and in total value correspond to the size of the sukuk to be issued of €200m.
More information regarding the Luxembourg sukuk can be found in the below article from KPMG Luxembourg.