Bonds will be issued on the request of the Economy Ministry and Iran Fara Bourse, the over-the counter stock market, according to a notice published on the IFB website.
Bonds mature in three years and interest will be paid every six months by the Central Securities Depository of Iran, the capital market’s clearing house. The notice did not elaborate on the interest rates.
The Plan and Budget Organization will guarantee reimbursement of the principal and interest, according to Financial Tribune.
Manfa’at Sukuk is a type of Islamic financial instrument that states ownership of a certain service or future profit of a lasting commodity transferred for a certain price. The security can help meet businesses’ immediate needs for liquidity with no access to end-users to finance their operations.
Last month, the ministry subscribed another package of bonds worth 100 trillion rials ($877 million) to help augment government spending.
The ministry announced plans to issue Islamic financial securities worth 380 trillion rials ($3.3 billion) to partly plug the budget deficit.
This year’s budget deficit is projected between 1,000 trillion and 1,500 trillion rials ($8.4b-$12.6b) and is to be fixed partly by cutting general expenses and measures to generate new revenues.
The Supreme Council of Economic Coordination -- an ad hoc economic decision-making body comprising the three branches of power -- in July okayed four methods to generate 970 trillion rials in new revenues, namely by divesting surplus property, withdrawals from forex reserves, borrowing from the National Development Fund of Iran - the sovereign wealth fund - and selling Islamic financial securities.