RABAT - Morocco started selling its first Islamic sovereign bonds worth 1.1 billion dirhams ($116 million) with a five-year maturity on Friday, the finance ministry said.

The sukuk sale was an Ijara issue in local currency with an annual yield of 2.66 percent, the ministry said in a statement later On Friday evening after the end of the subscription period.

Demand was 3.6 times higher than the Sukuk value with subscription orders standing at 3.6 billion dirhams, the ministry said, adding that 28 percent of the orders were processed.

Under this Ijara issue the state will cede for a five-year period the property of real estate assets whose annual rents will go to bondholders, it said.

This issue will help Islamic banks manage liquidity and resources, the ministry said.

Morocco has allowed five Islamic banks and three windows to offer Sharia-compliant banking services in the country since early last year.

Morocco is the most advanced among its North African neighbours in developing Islamic finance, which avoids interest and pure monetary speculation.

 

(Reporting by Zakia Abdennebi and Ahmed Eljechtimi Writing by Ulf Laessing) ((Ulf.Laessing@thomsonreuters.com; Reuters Messaging: follow me on twitter @ulflaessing))