Sharjah Islamic Bank (SIB) recently closed a $500 million sukuk in the international capital markets, with the issuance receiving an overwhelming response from investors. The sukuk, with a five-year maturity, was priced at a spread of 105 basis points + five years US Treasuries and will bear a profit rate of 5.25 per cent per annum with maturity on July 3, 2029. The strong demand from international and Middle East investors allowed the bank to tighten by 35 bps from the initial price talk of 140 bps area.
SIB’s CEO, Mohamed Abdalla, expressed satisfaction with the successful issuance, noting that it was the bank’s ninth entry into the international capital markets since 2006. The bank’s prudent management was highlighted as a key strength, reflected in the ratings and pricing of their transactions. The SIB delegation, led by Deputy CEO Ahmed Saad, emphasized the strengths of the UAE banking system and SIB specifically while presenting to international investors. The sukuk’s diverse geographical distribution saw the Middle East receiving 80 per cent allocation, with Asia and Europe receiving 13 per cent and 7 per cent, respectively.
The successful sukuk issuance also involved the guidance and support of several financial institutions. ENBD Capital, HSBC, and Standard Chartered acted 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 serving as Bookrunners. The collaboration of these institutions played a crucial role in the smooth execution of the transaction, showcasing confidence and trust in SIB’s financial standing and market reputation.
The strong response and oversubscription of the sukuk issuance demonstrate the confidence and trust that international investors have in SIB and the UAE banking sector as a whole. The successful tightening of the pricing reflected the bank’s ability to attract interest in its offerings and leverage its strong track record in the capital markets. The focus on diversifying the geographical distribution of the sukuk allocation further enhanced the appeal of the issuance to a wide range of investors in different regions.
The issuance of the $500 million sukuk by SIB not only underscores the bank’s strong financial position and prudent management but also highlights the growing interest in Islamic finance instruments globally. The bank’s consistent presence in the international capital markets since 2006 has helped build its reputation as a reliable and attractive investment option for investors seeking exposure to the UAE and Middle East markets. The success of this latest sukuk issuance adds to SIB’s credibility and positions it for future growth and expansion opportunities in the capital markets.
Overall, the recent sukuk issuance by Sharjah Islamic Bank has been met with exceptional demand and positive market response, signaling a strong confidence in the bank’s financial health and market standing. The diverse geographical distribution of the sukuk allocation, along with the support of leading financial institutions, has further solidified SIB’s position as a key player in the international capital markets. With prudent management and a track record of successful transactions, SIB continues to strengthen its presence and appeal in the global Islamic finance landscape.
