Islamic Iran to raise $870mn in Islamic bonds to finance projects

In a Saturday report, the IRNA agency cited an official from the Securities and Exchange Organization of Iran (SEO) as saying that sukuk worth 100 trillion rials ($869.5 million) will be issued through a middle company working for Iran’s ministry of finance in the week beginning October 27, 2019.

Gholamreza Aboutorabi said the bonds will be exempt from normal registration procedures in the SEO, suggesting they will be easier for future trade, adding that Iran’s Plan and Budget Organization (PBO) will guarantee payment of the interest at a rate of at least %17.9, as the rate is not fixed to comply with Islamic laws, and the principal of the debt certificates.

Aboutorabi said the interest for the sokuk, which have a maturity of three years, will be funded through the income derived from government taxation, adding that investors will receive their interest payments in six-month intervals.

Iran raises $700mn for oil project financingIranian officials say over $700 million have been raised for oil projects through the local bourse.

The report by IRNA said the planned debt issuance will be the largest ever carried out by the Iranian government.

It comes amid intensive efforts to continue to fund key development projects across Iran at a time sanctions imposed by the United States have affected government’s normal revenues.

Issuance of sukuk also comes amid a historic boom in trade in Tehran Stock Exchange where major companies, especially those active in the oil and gas industry, are benefitting from a flow of capital from speculative markets like foreign currency and gold.