On 23 July 2019, Emirates Strategic Investments Company (“ESIC”), , rated Baa3 by Moody’s with a stable outlook, successfully priced a debut USD 600 million 5-year Sukuk at a profit rate of 3.939% per annum (equivalent to 215bps over the 5-year US Mid Swap Rate).
The senior unsecured certificates were issued under ESIC’s recently established USD 1bn Sukuk program, which is listed on the London Stock Exchange.
Investor demand for the Sukuk was exceptionally strong as evidenced by a USD 3.7bn orderbook, representing an oversubscription rate of 6.2 times.
More than 135 investors from over 20 countries participated in the transaction. In terms of distribution, 61% of the Sukuk was allocated to international investors (33% to Asia, 24% to Europe and 4% to US offshore), and 39% was allocated to GCC investors.
By type, 62% were fund managers, 25% were banks, 9% were private banks and 4% were central banks and pension funds.
Thuwaini Al Thuwaini, President of the Banking Investment Group at Warba Bank confirmed that the sukuk subscription was a great success where it has achieved 6.2 more than the issuance value reaching USD 3.7 billion. He said: “we are pleased to take part in this phenomenal sukuk issuance which is a success for ESIC rated Ba33 by Moody’s; the sukuk has been issued under the established USD one billion Islamic Wakala based sukuk program rated as well on Baa3 by Moody’s”
The transaction followed a comprehensive marketing strategy aimed at introducing ESIC’s credit to the international fixed income community. A senior management delegation met with investors in Singapore, Hong Kong, Abu Dhabi, Dubai and London.
ESIC is the first corporate from Abu Dhabi to access the market in 2019, allowing it to fully capitalize on the overwhelming investor demand for Abu Dhabi credits.
Mr. Khalid Deemas Al Suwaidi, Chief Executive Officer of ESIC, commented: “Under the visionary leadership of His Highness Sheikh Mansour Bin Zayed Al Nahyan, ESIC was established to support the Abu Dhabi Economic Vision 2030 and other strategic initiatives of the UAE.
The Sukuk promotes the development of capital markets and Islamic finance in the UAE. ESIC’s success is expected to pave the way for other privately held entities from the UAE to access the international capital markets. We are very pleased with the successful outcome and the international investor demand that we received, which reflects the UAE’s strong standing in the international community”.
The deal was led by First Abu Dhabi Bank and Standard Chartered Bank as Joint Global Coordinators. Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, National Bank of Bahrain, Standard Chartered Bank and Warba Bank acted as Joint Lead Managers. Allen & Overy acted as legal counsel for the banks, and Simmons & Simmons acted for ESIC.
Al Thuwaini concluded that Warba Bank continues to support the corporate sector in emerging markets by providing flexible and efficient financing and investment’s solutions; that comes in line with the Bank’s strategy to secure its position as leading in this domain in Kuwait as well as international markets.
