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First Abu Dhabi Bank (FAB) placed a five-year, USD 800 mn sukuk on Thursday at 85 basis points (bps) over US treasuries, good for an all-in yield of nearly 4.8%, state news agency Wam reports. The shariah-compliant bonds are part of a USD 5 bn trust certificate issuance program announced last January, according to the prospectus (pdf).
Fast fact: It’s both the first global sukuk issuance of the year and the region’s first non-sovereign issuance of 2024. (Saudi Arabia sold USD 12 bn worth of Yankee bonds in a similarly oversubscribed issuance last week.)
Investor demand was strong:The offering was 1.9x oversubscribed, with FAB receiving USD 1.45 bn in orders from international fund managers, supranationals, and banks, leading the bank to narrow the spread, Reuters reported earlier, citing a document it has seen. Some 76% of the sukuk was allocated to Islamic investors, while 38% was allocated to international counterparts, reports Wam.
Background: The spread was revised downwards from earlier guidance of 100 bps on strong investor demand, resulting in one of FAB’s lowest spreads on any USD-denominated debt transaction.
ADVISORS- Dubai Islamic Bank, Emirates NBD Capital, HSBC, KFH Capital, Sharjah Islamic Bank, Standard Chartered Bank, and the Islamic Corporation for the Development of the Private Sector were joint lead managers and bookrunners, according to Reuters.
