Equity-Based Sukuk Return to Iran Capital Market

EghtesadOnline: The government is set to clear part of its debt to Social Security Organization by issuing 12 trillion rials ($150 million) of equity-based Ijarah sukuk on the capital market.

News ID: ۷۸۳۷۰۸

18 August 2018

The three-year bonds, with a 19% interest yield, will be traded on IFB,” Gholamreza Aboutorabi, the head of Central Securities Depository of Iran, said.

The date of issue has not been announced yet, according to Financial Tribune.

The government’s debt to SSO amounts to over 1.5 quadrillion rials (about $18.7 billion), the Persian daily Shargh reported.

This would be the second time this type of Islamic debt security is being issued in the capital market.

Ijarah sukuk are securities representing the ownership of well-defined assets tied up to a lease contract, the rent for which is the return payable to sukuk holders.

The “well-defined” assets here are the stake in Tamin Petroleum and Petrochemical Investment Company owned by Social Security Investment Organization, which will eventually be bought back by the government and transferred to SSIC when the bonds mature.

SSO’s investment arm, also known by its Persian acronym Shasta, first introduced equity-based sukuk late last fiscal year (March 2017-18). It issued two batches of sukuk worth 10 and 20 trillion rials ($125 million and $250 million) respectively, Securities and Exchange News Agency reported.