Luxembourg Bond Plan to Test Islamic Shariah Cash Depth
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Luxembourg is poised to test demand for Islamic bonds as the issuer of the lowest-yielding sovereign sukuk on record plans to become a regular borrower.
The country has been “encouraged” by investor feedback and the market’s readiness and will begin working on its next sukuk today, Finance Minister Pierre Gramegna said. Luxembourg, one of the smallest economies in the 28-member European Union, sold 200 million euros ($254 million) of five-year Islamic bonds in September priced two basis points below midswaps. That compared with 10 basis points above the swaps for notes of similarly rated Islamic Development Bank.