JOHANNESBURG: The South African government plans to raise at least $500 million in its first issue of Islamic bonds, a Treasury official indicated on Thursday.

“South Africa is looking to issue a benchmark-size sukuk and the tenor will be in line with other sukuk transactions in the market,” Tshepiso Moahloli, director of debt issuance and management, told Reuters.

Traditionally, benchmark size is understood to mean at least $500m. Five years is the most popular tenor for major international sukuk issues, and South African officials said last year that the country was leaning towards that tenor for its U.S. dollar-denominated sale.

The government has said it was issuing a sukuk in order to diversify its fund-raising. It has hired BNP Paribas, Standard Bank, and KFH Investment, a unit of Kuwait Finance House, to handle investment meetings in Europe, Asia and the Middle East starting on Sept. 8, Moahloli said.

Published in Dawn, August 29th, 2014