Bahrain Mumtalakat Holding Company has successfully priced a $600 million seven-year sukuk with a four per cent profit rate.

Mumtalakat is rated BBB (stable) by both Fitch and Standard & Poor’s, said a report in the Gulf Daily News (GDN), our sister publication.

The transaction represents Mumtalakat's first dollar sukuk issuance and was executed as a drawdown under its recently established $1,000 million Regulation S Multicurrency Trust Certificate Issuance Programme which is listed on the Irish Stock Exchange.

It also marks the company's return to the dollar debt capital markets following its inaugural bond issuance in 2010.

The success of Mumtalakat's sukuk issuance was underpinned by a comprehensive set of investor meetings covering key financial centres, namely, Kuala Lumpur, Singapore, Abu Dhabi, Dubai and London.

Mumtalakat's strong credit fundamentals and robust financial position made a compelling story for fixed income investors.

Moreover, the innovative sukuk structure (a hybrid structure comprised of a Commodity Murabaha and a Wakala based on Mumtalakat's holding in its portfolio companies) allowed the company to capitalise on the strong Islamic pool of liquidity.

The order book, which was opened on Monday in the morning in London, reached $2.6 billion (4.3 times oversubscription), with over 150 accounts taking part.

At least 81 per cent of the issuance went to Middle Eastern accounts, with 19pc allocated to Asian and European investors.

The majority of investors were banks and fund managers (collectively 95 per cent of the issuance).

Leveraging off the strong participation from regional and international investors, Mumtalakat was able to achieve a final price of 205bps over dollar mid-swaps.

“We are extremely pleased with the success of this transaction,” Mumtalakat chief executive Mahmood Al Kooheji said.

“The remarkable support provided by fixed income investors is a testament to their confidence in our credit and trust in our strategy.

“We are also delighted to have played an important role in further developing the Bahraini debt capital markets,” he added.

BNP Paribas, Deutsche Bank, MUFJG and Standard Chartered Bank acted as joint lead managers on the issuance, while Arab Banking Corporation and National Bank of Bahrain acted as co-lead managers. - TradeArabia News Service