FAB, an Abu Dhabi megabank, is the first to issue a dollar-denominated Sukuk in 2023, with a $500 million five-year offering. The Sukuk was priced at 90 basis points over the US Treasury Rate, equating to a compelling 4.58% profit rate. It is also listed on the London Stock Exchange.
Rula AlQadi, Group Treasurer at FAB, stated that “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,” added AlQadi. The Sukuk issuance was managed by FAB as a joint lead manager. According to Gulf News, using FAB’s funding curve, the Sukuk pricing is around 10 basis points inside fair value for a new 5-year bond and at zero new issue premium. “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,” FAB said in the statement.
