FAIRFIELD, Conn. ( TheStreet) - General Electric (GE - Get Report) has sold $500 million worth of five-year Islamic bonds, making it the first major U.S. corporate issuer of what is known as "sukuk," according to The Wall Street Journal.
Islamic bonds make "profit distributions," to investors, as interest payments are not allowed under shariah law, according to Bloomberg. The market for these bonds has struggled due to the financial crisis, The Journal reports, although, it is seen as having great promise. The Economist noted a year ago that Muslims account for 20% of the world's population but Islamic financial instruments represent less than 1% of the total.
GE's Islamic-compliant bonds yield 1.75% over Treasuries, compared to 1.55% on a $1.5 billion issue by GE Capital on Nov. 10, according to Bloomberg. Citigroup (C) and Goldman Sachs (C) were among the underwriters of the deal, along with Liquidity Management House for Investment Co. and the National Bank of Abu Dhabi, a GE spokeswoman told TheStreet.com.
-- Written by Dan Freed in New York.