FAB successfully closes landmark $500 million Sukuk
Abu Dhabi, 24 February 2022: First Abu Dhabi Bank PJSC (“FAB”), rated Aa3 by Moody’s, AA- by Standard & Poor’s and AA- by Fitch (all with stable outlook), priced its first public deal in 2022 with a $500 million 5-year Sukuk at 70bps over the U.S. Treasury Rate (equivalent to a fixed profit rate of 2.591% per annum) on February 23, 2022.
Rula Al Qadi, Head of Group Funding at FAB , commented “The success of this transaction demonstrates FAB’s loyal investor following. Market conditions have been volatile in recent times, with multiple global events impacting credit markets. Despite this backdrop, FAB priced a $500 million Sukuk at 70bps over the U.S. Treasury Rate, which is the tightest spread ever achieved by FAB or any other MENA bank on a public fixed rate bond or Sukuk issuance.”
The Sukuk was swiftly executed intraday to mitigate market risk. The orderbook opened in the morning and was anchored by Islamic bank investors. Additional demand came from conventional fund managers, multilateral agencies and insurance companies. The final orderbook closed at $1.4bn, representing an oversubscription rate of approximately 2.8 times. The Sukuk format of the transaction allowed FAB to capture abundant Islamic investor liquidity, resulting in 93% of the issuance being allocated to Islamic accounts, which is more than the average seen on other similar transactions. The orderbook also comprised high-quality investors from outside the region with 36% of the issuance being allocated internationally.