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Sharjah Islamic Bank successfully issues $500 million sukuk

Issue was oversubscribed more than three times

Sharjah Islamic Bank (SIB) successfully closed a $500 million sukuk in the international capital markets on Wednesday. The issuance received tremendous response from international investors, attracting orders that peaked at $1.5 billion, meaning that the issue was oversubscribed more than three times.

The sukuk has maturity of five years and was priced at spread of 105 basis points + five years US Treasuries. The sukuk will bear a profit rate of 5.25 per cent per annum with maturity on July 3, 2029. The bank was successfully able to tighten by 35 bps having announced initial price talk (IPTs) at 140 bps area due to the strong demand from international and Middle East investors.

Mohamed Abdalla, CEO of Sharjah Islamic Bank, said: “This is our ninth foray in the international capital markets, having issued a sukuk as early as 2006. The bank remains strong under prudent management and that reflects in the ratings and pricing of our transactions.”

The SIB delegation was led by Ahmed Saad, the deputy CEO along with Saeed Al Amiri, head of investments, treasury and financial institutions and Ali Wahab, head of investment banking. While presenting to international investors, Saad highlighted the strengths of the UAE banking system in general and SIB in particular. “The sukuk’s diverse geographical distribution was a key target of the issue. We were able to allocate diversely with Middle East getting 80 per cent while Asia and Europe getting 13 per cent, 7 per cent respectively. The interest in middle eastern credit story in general and Sharjah Islamic Bank in particular was very strong and heartening for us despite a volatile market background,” he added.

The SIB was advised by ENBD Capital, HSBC and Standard Chartered as Joint Global Coordinators with Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Bank ABC, Dubai Islamic Bank, ENBD Capital, First Abu Dhabi Bank, HSBC, Mashreq, QNB Capital and Standard Chartered Bank acting as Bookrunners.