Four new assets have been added to the transaction structure of Ijara Sukuk by the government in an attempt to borrow from the Islamic banking sector to curtail the fiscal deficit, reported Business Recorder.
State Bank of Pakistan (SBP) has issued an Addendum of the Transaction Structure to make changes in the additional underlying assets in GOP Ijara Sukuk (GIS) structure.
SBP has told that according to the provision of the Sukuk transaction structure at the time of reopening, additional undivided share of new assets could be purchased individually or jointly and added to the Sukuk Asset Pool through single or multiple reopening transactions that are coherent with the approved mechanism.
Four different assets have been added, which include M-4, CPEC-WC, M-8, and CPEC-NC under the authority of the National Highway Authority (NHA).
It was reported that with the help of the additional four assets, the government would be able to generate an additional Rs. 300 to Rs. 400 billion from the Islamic banking sector.
SBP has also issued a transaction structure for the issuance of GIS for the underlying assets. According to the structure provided by SBP, the valuation of assets will be carried out by two independent evaluators approved by Pakistan Banks’ Association (PBA). The asset will be valued at the lower price out of the two valuations.
An auction will be conducted by the State Bank of Pakistan, in which Sukuk investors will be identified. Non-competitive bidders are also allowed to submit their bids for the Sukuk.
Sukuk Subscription Undertaking will be signed by the investors to record their commitment to subscribe to the Sukuk. The Sukuk Subscription Undertaking will also be signed by the primary dealers on behalf of the successful non-competitive bidders.
The investors will also be able to appoint Pakistan Domestic Sukuk Company Limited (PDSCL) as their agent of purchase of assets on their behalf.
SBP will also conduct an auction for reopening of the existing Sukuk Issue instead of issuance of a new Sukuk wishes to raise new funds by way of re-opening.
