Abu Dhabi Islamic Bank (ADIB), a top-tier Islamic financial services group, has returned successfully to the Sukuk markets with the issuance of US$500 million, 5-year Sukuk (REG S Fixed Rate Trust Certificates) issued at a profit rate of 3.78%. The maturity date of the Sukuk, rated A2 (stable outlook) and A+ (stable outlook) by Moody’s and Fitch respectively, is November 30, 2016. The transaction marks the third benchmark deal done by ADIB under its US$5 billion Sukuk Program initiated in 2007.
The transaction follows a series of investor meetings in Asia, Middle East and Europe. Books opened afternoon London time on Monday, 21st November 2011 with a pricing thought of mid 200s area. Price guidance of 250 +/-5 basis points was released on Tuesday 22nd November London open. Accounts reacted positively, allowing ADIB to close the books and price on the same afternoon at the tight end of the price guidance.
The ADIB Sukuk was well-received by investors, accumulating an order book of over US$2 billion across 122 investors. The book was driven by broad demand across three regions, with allocations of 57% to Middle East investors, 29% to Europe and 13% to Asia. By investor type, the split was 52% to banks, 28% to fund managers, 16% to central banks and agencies, 2% to private banks and 2% to other investors.
Commenting on the Sukuk issuance, Tirad Mahmoud, CEO of ADIB, said: “We are pleased with the strong support from investors for ADIB’s third benchmark Sukuk issuance. This transaction reflects the strong demand from investors for our rare and highly rated credit and proves that investors around the globe remain highly receptive to our institution. This Sukuk has further strengthened ADIB's balance sheet and delivered our primary aim of diversifying and lengthening the average maturity of our funding sources. It will allow us to better manage our successful customer-centric growth strategy.”
The certificates will be issued by ADIB Sukuk Company and are expected to settle on November 30, 2011 and be listed on the London Stock Exchange. ADIB, Citibank, HSBC, NBAD, Nomura and Standard Chartered Bank were the Joint Lead Managers and Book-runners for the offering.