Dubai: Al Hilal Bank yesterday issued $500 million tier 1 sukuk certificates with the transaction attracting demand worth $4.5 billion from over 200 investors.
The offering follows Al Hilal Bank’s inaugural senior sukuk offering in October 2013 and has been structured to increase the probability of compliance with Basel III, the voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity risk.
The issuance was priced at par with a profit rate of 5.5 per cent, which represents the lowest coupon ever achieved by any bank for a dollar denominated tier 1 issuance outside of the US since 2008.
Joint lead managers for the issue included Al Hilal Bank, Abu Dhabi Islamic Bank, Al Rayan Investment, Citigroup, Emirates NBD Capital, HSBC, Sharjah Islamic Bank (SIB), National Bank of Abu Dhabi (NBAD), and Standard Chartered Bank.
The issuance has a diverse geographical distribution, with the Middle East and North Africa region comprising (40 per cent), Asia (31 per cent), and Europe (29 per cent).
“We are very pleased with the exceptional investor response to Al Hilal Bank’s second issuance in the debt capital markets and first capital-eligible offering. “The strong investor interest resulted in the transaction achieving an order book representing more than nine times the offered amount. The transaction is further testimony to the confidence that international investors continue to have in the strength of Al Hilal Bank’s credit,” said Ahmad Ateeq Al Mazrouei, Chairman, Al Hilal Bank
Investor types involved in the transaction included Funds (32 per cent); Private Banks (31 per cent); Banks (29 per cent); and Insurance (8 per cent).
“The response from the investor community has been very encouraging and serves as a testament to Al Hilal Bank’s credit fundamentals. We are pleased that the orderbook achieved a highly diversified set of investors, allowing us to achieve a balanced allocation both across geographies and investor types,” said Mohammad Jamil Berro, CEO, Al Hilal Bank.