On Wednesday, Sharjah Islamic Bank (SIB) successfully closed the $500 million sukuk on the global capital markets. International investors responded incredibly well to the issuance; orders reached a peak of $1.5 billion, more than three times the subscription.
The five-year-old sukuk was priced at 105 basis points plus five-year US Treasury bonds. The Sukuk will mature on July 3, 2029, with an annual profit rate of 5.25%. The bank’s strong demand from investors in the Middle East and abroad allowed it to successfully tighten by 35 basis points after announcing IPTs at 140 basis points. The CEO of Sharjah Islamic Bank, Mohamed Abdalla, expressed gratitude to every investor for their sukuk investment and vote of confidence in the bank. “This is our ninth venture into the global capital markets; we first issued a sukuk in 2006,” he declared. The ratings and cost of our transactions reflect the bank’s continued strength under careful management.
The Deputy CEO, Ahmed Saad, emphasized the advantages of SIB in particular and the UAE Banking system. The issue’s primary target was the Sukuk’s wide geographic distribution. We distributed fairly, giving the Middle East 80% of the allocation and Asia and Europe 13% and 7% of the total, respectively. Despite a volatile market backdrop, we were encouraged by the strong interest in the Middle Eastern credit story in general and Sharjah Islamic Bank in particular, he said.
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