Emirates NBD has arranged a five-year Senior Unsecured Sustainable Sukuk for Al Rajhi Bank, the world’s largest Islamic bank by assets and market capitalization, valued at $1B. The Sukuk was priced at a reoffer yield of 4.774%, attracting orders of over $3.75B, which allowed Al Rajhi to tighten pricing by 40 basis points to 5-year US Treasury + 110 basis points from an initial price guidance of 150 bps. Middle Eastern investors accounted for 49% of the allocation, with high-quality international investors also showing strong demand.
This Sukuk is the first debt capital market transaction by a financial institution in Central and Eastern Europe, Middle East, and Africa since the recent volatility in the global banking sector. The Sukuk was issued under Al Rajhi’s $4B Trust Certificates Programme, which was established in April 2022. The proceeds will be used to finance and refinance Eligible Sustainable Projects, in line with the bank’s Sustainable Finance Framework.
Al Rajhi Bank’s CEO, Waleed Almogbel, expressed gratitude for the support of local and international investors during the marketing process, stating that the success of the Sukuk reflected their confidence in the bank and the solid foundations of the Kingdom. He also reiterated the bank’s commitment to sustainable financing and looked forward to the annual Allocation and Impact report, which would detail the environmental and social benefits created by the Sukuk transaction, according to WAM.
Emirates NBD Capital’s CEO, Mohammad Al Bastaki, said that the success of Al Rajhi Bank’s debut Sukuk was a testament to the confidence of investors in the bank and the increasing demand for sustainable financing solutions. He affirmed the bank’s commitment to providing dynamic sustainable financing solutions to meet the rising demand from regional and global clients.
