The UK government has listed its first Islamic bond on the London Stock Exchange (LSE), which marks the first time a country in the western world has launched a sovereign sukuk.

The bond has already raised £200m on orders totalling more than £2bn.

Economic secretary to the UK Treasury, Andrea Leadsom, said the listing was “great news for our financial services”, adding:

“The strong demand for the sukuk not only delivers good value for money for the taxpayer, but also cements Britain's position as the western hub of Islamic finance and is a part of our long term economic plan to make Britain the undisputed centre of the global financial system."

Noting the “exceptional demand” for the bond, the LSE’s CEO Xavier Rolet said the listing showed the UK is a “key destination” for foreign, shariah-compliant financial products and institutions.

The UK sovereign sukuk will have a maturity of five years and use the Al-Ijara structure, which is the most common structure for this type of bond. The sukuk will be underpinned by rental income from three central government office properties, which will remain in government ownership during the bond’s lifetime.