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Wednesday, February 21, 2024

Launch Partners

QIIB issues US$500 million sustainable Sukuk; receives US$4 billion in subscriptions

QIIB has returned to the Islamic debt capital market after a three-year absence, successfully issuing a sustainable Sukuk facility worth US$500 million.

The five-year facility, which was issued under the bank’s Sukuk program established in 2020 worth US$2 billion, was priced at a spread of 120bps above the five-year US Treasury rate, with a final fixed yield of 5.25% annually.

The Sukuk received subscription requests reaching over US$4 billion.

The bank had, the week prior, appointed Standard Chartered Bank as the global coordinator for the issuance, and Al Rayan Investment, Dukhan Bank, Emirates NBD Capital, KFH Capital, Mashreq Bank, the Islamic Corporation for the Development of the Private Sector and QNB Capital as the joint bookrunners and joint lead managers.

Local media reported that over 120 investors from around 19 countries participated in the issuance. The Sukuk issuance is expected to be rated ‘A-‘ by Fitch Ratings.

The Sukuk issuance closely follows the launch of QIIB’s Sustainable Finance Framework, which aims to finance green projects, including green buildings, pollution control, renewable energy and energy efficiency initiatives, and also social initiatives, such as employment generation and affordable infrastructure projects.

Under the framework, the bank can issue green, social or sustainability Sukuk facilities.

QIIB last issued Sukuk in 2020 — a US$300 million Islamic paper. In 2019, the bank issued a US$500 million Sukuk facility — its second international issuance after its debut Sukuk issuance was launched seven years before.

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