Brunei sells $20.5 mln in 91-day Islamic debt

KUALA LUMPUR - Brunei has sold B$28 million ($20.5 million) of 91-day Islamic bonds at a yield of 0.88 percent, the government said.

The issue, which matures on Sept 18, is the 14th sale of short-term Islamic securities based on the "ijarah" or leasing arrangement.

With this issue, Brunei has so far sold B$1.1 billion worth of short-term Islamic bonds since its maiden offering in April 2006, the government said in a statement sent out on Monday.

Oil-rich Brunei is flush with cash but is issuing debt to build a market to become a regional hub in Islamic finance.

Islamic bonds do not pay interest, which is banned as usury under Islamic law, and are structured as profit-sharing or rental agreements underpinned by physical asset. ($1 = 1.36 Brunei dollars.