Iran Seven-Year Sukuk Issuance at $3.7b

Since seven years ago when the Law of Developing Financial Instruments and Entities was passed in the parliament, more than 157 trillion rials ($ 3.76 billion) worth of Islamic sukuk have been issued in the Iranian capital market, the chief executive of the Capital Market Central Asset Management Company.

"From the fiscal 2010-11 up to the end of the ninth month of the current fiscal year (Dec. 21), 47 kinds of sukuk worth more than 157 trillion rials have been released in the capital market, 17 of which worth 13 trillion rials ($311.7 million) have come to maturity," Gholamreza Abutorabi was also quoted as saying by the official website of the company.

"The amount of installments and the original amount of these matured bonds have been reimbursed," he added.

According to the CEO, 30 kinds of active sukuk worth 147 trillion rials ($3.5 billion) are currently in use and are being traded, whereas two other kinds worth a total of 3.775 trillion rials ($89.9 million) belonging to two companies will come to maturity.

From the beginning of the current fiscal year on March 20 until now, more than 17 trillion rials ($407.6 million) worth of installments pertaining to various kinds of sukuk have been received by intermediary financial companies.

"These bonds have been subsequently cleared and transferred to accounts belonging to owners of the bonds by the Central Securities Depository of Iran," Abutorabi said.

As the CEO points out, Ijarah bonds have accounted for the highest shares among all kinds of sukuk with more than 86 trillion rials and 32 instances of issuance.

Other kinds of sukuk, namely Murabaha, mortgage-backed and Istisna bonds rank next respectively at 66.4 trillion rials ($1.59 billion), 3 trillion rials ($71.9 million) and 1.6 trillion rials ($38.3 million) each.

As to future Islamic bond issuance in the Iranian capital market, the chief executive said Iran Khodro, Iran's largest automaker, Gol Gohar Company and Adourateb Company plan to come up with resources by releasing a total of 10.2 trillion rials ($244.6 million) in bonds.

In mid-September, Abutorabi had announced that the Securities and Exchange Organization has given the go-ahead to Iran Khodro Group to issue 7 trillion rials ($167.8 million) worth of Murabaha sukuk to finance the purchase of parts and materials required for auto manufacturing.

The securities are to be offered on Tehran Stock Exchange, mature in four years and have a return rate of 18%.

"The final approval for this has been issued and measures are currently being undertaken for them to receive the permits to issue the bonds," Abutorabi concluded.