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SIB issues fifth 5-year sukuk

Sharjah Islamic Bank (SIB) has issued an unsecured US$ 500 million (AED 1.8b) 5-year sukuk, according to a statement from the bank. The bank’s fifth Islamic bond was oversubscribed by more than three times booking orders totalling about US$ 1.6 billion (AED 5.9b). In a year that has, so far, seen sukuk issuances drop slightly, the new issue confirms the continuing global interest in Islamic bonds and the Middle East.

Sharjah Islamic Bank issued its first sukuk in 2006 and, counting this week’s new sukuk issue, it now has three sukuk accounting for $1.5 billion of bonds. SIB has an unsecured five-year US$ 500 million (AED 1.8b) Islamic bond issued in April 2013, maturing in 2018, and another US$ 500 million 5-year sukuk issued in March 2015, which matures in 2020.

Moody’s Investors Service assigns an A3 senior unsecured (foreign and local currency) MTN rating with Stable Outlook to the USD3 billion (AED 11 b) Trust Certificates Issuance Programme of SIB Sukuk Company III Limited, a special purpose vehicle incorporated in the Cayman Islands by Sharjah Islamic Bank PJSC (SIB).

SIB’s fifth sukuk was launched last week, with lead arrangers Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, HSBC, KFH Capital, Maybank, Noor Bank, QNB Capital and Standard Chartered organising investor meetings for SIB in Asia, Europe and the Middle East. Ajman Bank, Union National Bank, Warba Bank also acted as co-lead managers.

The bond launch met with strong demand from international and Middle Eastern investors, with Middle East investors taking 59 percent of the issue, Asia 22 percent, Europe 16 percent and US Offshore investors 3 percent.

The sukuk was finally priced at a spread of 185 basis points (bps) over midswaps (a benchmark for calculating bids), translating into a coupon of 3.084 percent. The bank began with an initial price guidance of 205 bps last week, before tightening by 20 bps.

SIB is the 15th largest Islamic bank in the GCC with AED 29.8 billion (c. US$ 8b) of assets. The bank is rated at A3 by credit rating agency Moody’s Investor Services, and BBB+ by Standard & Poor’s, Fitch and Capital Intelligence Ratings (CI Ratings), with stable outlook rating from all agencies. SIB is 30% owned by the government of Sharjah and has positioned itself as an Islamic banking leader with a growing portfolio of Shari’ah-compliant banking products ands services.

Source: SIB, media

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