Name of borrower: Islamic Republic of Pakistan
Amount: PRe90 billion
Tenor: One year
Underwriter: Meezan Bank, Dubai Islamic Bank (Pakistan), Bank Islami Pakistan, Bank Alfalah Limited
Date: December 8, 2023
The Islamic Republic of Pakistan’s PRe90 billion ($320 million) sukuk is the country’s Islamic finance deal of the year.
In this landmark transaction, the country auctioned its first sovereign ijarah sukuk on the Pakistan Stock Exchange. The auction attracted 172 bidders, while total bids amounted to PRe369 billion. Accepted bids reached PRe39.19 billion.
The sukuk adhered to the shariah-compliant ijarah principle, with government promising a return in the 20% to 22% range to investors for a one-year tenor.
The launch of a listed sukuk through the local exchange is poised to greatly boost Islamic finance and contribute to the development of a shariah-compliant capital market in Pakistan.
Additionally, it is expected to diversify government funding sources, enhancing Pakistan’s stability and growth prospects.
The deal was led by joint financial and shariah advisers Meezan Bank, Dubai Islamic Bank Pakistan, Bank Islami Pakistan and Bank Alfalah.