The UK government has issued £500m of sukuk seven years after becoming the first country in the western world to issue sovereign Islamic bonds.
The treasury said the sukuk had been sold to investors based in the UK and in the major hubs for Islamic finance in the Middle East and Asia.
This latest issue will settle on 1 April 2021 and will be listed on the London Stock Exchange.
Chancellor of the exchequer Rishi Sunak said: "We've set out ambitious plans to make the UK the most open and dynamic financial centre in the world.
"By launching our second sovereign Sukuk, we're cementing the UK's position as the leading global hub for Islamic finance outside of the Islamic world.
"Strong investor demand for this Sukuk meant we achieved a good price for the taxpayer and will help us develop our relationships with Islamic economies around the world."
This second issuance, which follows the UK's first venture into this space in 2014, attracted orders totalling in excess of £625m.
The profit rate (yield equivalent) on the Sukuk, which matures on 22 July 2026, has been set at 0.333%, flat to the yield on the 1.5% gilt due July 2026.
The treasury added that as with the first issue, the second sovereign Sukuk will use the Al-Ijara structure which is in widespread use in the market.
It will be underpinned by rental income from a number of central government office properties.
