First Abu Dhabi Bank (FAB) has re-opened the international capital markets for Middle East issuers with the first dollar-denominated Sukuk of the year, a USD 500 million RegS 5-year Sukuk issue that was successfully priced on January 9, 2023.
The 5-year sukuk was priced at 90 basis points over the U.S. Treasury Rate which is equivalent to a profit rate of 4.581% and is listed on the London Stock Exchange. Based on FAB’s funding curve, the Sukuk pricing is circa 10bps inside fair value for a new 5-year bond and at zero new issue premium for a new 5-year Sukuk. This is an exceptional result given the market volatility witnessed in 2022 and possible only due to the bank’s sound credit profile and standing with international investors.
Rula AlQadi, Group Treasurer at FAB, commented: “We’re delighted with the result of our first public issuance in 2023. While this issuance is catered predominantly to our Islamic investors, it also refreshes our pricing benchmark for our private placements and issuances in other markets. I would like to thank our investors and partners for the trust placed in FAB which helped us price inside our conventional curve – a fantastic result especially after a very tumultuous 2022 for fixed income. Our wholesale funding will be driven by the diversity of investor base and cost-efficient markets and the Sukuk market is especially important for us in this regard.”
FAB also acted as joint lead manager on this Sukuk issuance.
