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Emirates NBD announced the successful pricing of the $1 billion unsecured senior sustainable sukuk of Al Rajhi Bank, the world’s largest Islamic bank by assets and market value.
The five-year Sukuk, which was priced at a repurchase yield of 4.774%, was very popular; It attracted orders exceeding $3.75 billion. The strong demand from investors led Al Rajhi Bank to cut the profit rate by 40 basis points on the five-year US Treasury note to 110 basis points compared to the initial pricing of 150 basis points. The sukuk received a strong response from investors in the Middle East, who accounted for 49% of the total offering volume. The offering also witnessed strong demand from prominent international investors.
The issuance of sukuk came within the framework of the bank’s sukuk issuance program, through which it seeks to raise four billion dollars, and which was launched in April 2022. The proceeds of the offering will be directed to financing and refinancing, in whole or in part, for sustainable projects that qualify under the framework of sustainable financing. approved by the bank. This offering is the first deal in the debt capital market by a financial institution in Central and Eastern Europe, the Middle East and Africa, in light of the recent fluctuations that have cast a shadow on the global banking sector.
On this occasion, Waleed bin Abdullah Al-Muqbel, Managing Director and CEO of Al-Rajhi Bank, said: “The success of our first sukuk issuance, in light of the various fluctuations and challenges the markets are witnessing, reflects the confidence of investors in Al-Rajhi Bank and the solid foundations of the Kingdom’s economy. While we are proud to announce the Bank’s commitment to sustainable financing as part of its efforts to diversify its funding strategy, we are grateful for the exceptional support from our local and international investors after the great participation we witnessed during the marketing of these sukuk. We look forward to publishing our annual report on the allocation and impact of sukuk in order to inform investors and inform them with greater transparency and clarity about the most important environmental and social benefits that this deal will achieve.”
For his part, Mohammed Al Bastaki, CEO of Emirates NBD Capital, said: “We are pleased with the successful conclusion of Al Rajhi Bank’s sukuk offering despite the unstable environment in the markets, and we are proud of the great confidence that we have from our customers based on their firm conviction in our ability to support all their requirements through innovative solutions. This is a strong testament to our record of achievements and successes in the debt instruments markets in the region. Emirates NBD renews its commitment to its leading role in providing a diversified and innovative portfolio of sustainable financing solutions that are in high demand from customers in the region and around the world.
