Malaysia has become the first nation to offer a sovereign U.S. dollar-based sukuk to exclusively fund environmental projects.
A sukuk is an Islamic financial certificate, similar to a bond in Western-based finance systems, that adheres to Sharia law. According to Investopedia, sukuk involves a direct asset ownership interest, as opposed to the function of a bond, which is an indirect interest-bearing debt obligation.
The Southeast Asian nation issued $800 million of 10-year trust certificates on Thursday, as well as $500 million in 30-year trust certificates. The initial target size was $1 billion, but the offering was oversubscribed by 6.4 times due to heavy demand.
