Turkey Issues Sukuk

Turkey announced that it was issuing its first sukuk, or bonds compliant with Islamic law. Turkey expects that it will sell $1 billion of the dollar-denominated bonds. Turkey will sell certificates to investors, who then lease them back at a fee. The offer is oversubscribed, with about $6 billion in orders for the bonds. The sukuk will pay an interest rate about the same as comparable Turkish government bonds. Overall, about $13 billion of the $24.3 billion worth of bonds issued in the Middle East in the first half of 2012 have been sukuk.