First Abu Dhabi Bank issues $500 mln sukuk

The UAE’s biggest lender has sold a $500 million sukuk.

First Abu Dhabi Bank said in a statement on Monday (Jan 11) the five-year sukuk was three times oversubscribed with a total order book of around $1.5 billion. The bank started marketing the sukuk on Thursday (Jan 7).

FAB’s first benchmark offering of the new year carries a yield of 1.411%.

“Pricing on the deal at MS+90bps represents a negative new issue premium when compared to FAB’s January 2025 maturity Sukuk which was trading at MS +104bps on day of deal announcement,” said the bank.

“This resulted in FAB printing the lowest-ever yielding five-year USD bank paper from MENA.”

The sukuk’s investor base comprised 53% international and 47% from the Middle East and North Africa.

The placement to Islamic investors was 76%, according to FAB.

Kuwait based asset management company Kamco Invest said on Jan 5 that bonds and sukuk issued by GCC governments and corporates reached $142 billion for January to November last year, exceeding 2019 levels. The increase in borrowing is a result of fiscal pressure from the drop in economic activity and lower oil revenues.

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