BLME is set to offer an alternative to traditional asset finance.
The Bank of London and the Middle East (BLME) has set up a new capital markets desk to advise on Islamic bonds, potentially relying on company assets to finance issues.
It is hoped that the move will attract investors from overseas by offering alternatives to conventional financing instruments used as
asset finance and
property investment.
Islamic bonds, known as sukuk, are arranged so that they are compliant with Shariah holy law, which prohibits the charging or paying of interest.
BLME is confident that it will be able to offer UK and international corporate businesses "robust and commercially attractive products" in the current market.
The bank's chief executive Humphrey Percy explained: "BLME is well positioned to facilitate the issuance and distribution of sukuk, as well as a growing range of innovative Islamic investment products that can help to meet investor demand for a greater choice of alternative and relatively secure investment products."
Speaking to Reuters, the new head of the division, Massoud Janekeh, explained that clients attracted by the bonds may be from the property sector or equipment operators.
He explained: "If you owned trains, for example, these could be used for a sale and lease-back."
Posted by Lisa Fear
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