Al Hilal issues $500m tier 1 sukuk capital
Abu Dhabi, July 2, 2014
Al Hilal Bank has priced a $500 million Perpetual Additional Tier 1 sukuk certificates, marking the first Tier 1 issuance out of the Middle East since May last year.
The transaction, which was nine times oversubscribed, drew demand worth $4.5 billion from over 200 investors, said a statement.
The offering follows the bank’s inaugural senior sukuk offering in October last year and has been structured to increase the probability of compliance with Basel III, the voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity risk.
The issuance was priced at par with a profit rate of 5.5 per cent, which represents the lowest coupon ever achieved by any bank for a USD Tier 1 issuance outside of the US since 2008.
The joint lead managers for the issue included Al Hilal Bank, Abu Dhabi Islamic Bank, Al Rayan Investment, Citigroup, Emirates NBD Capital, HSBC, Sharjah Islamic Bank (SIB), National Bank of Abu Dhabi (NBAD), and Standard Chartered Bank.
The issuance has a diverse geographical distribution, with the Mena region comprising (40 per cent), Asia (31 per cent), and Europe (29 per cent).
Investor types involved in the transaction included funds (32 per cent); private banks (31 per cent); banks (29 per cent); and insurance (eight per cent).
Ahmed Ateeq Al Mazrouei, chairman, Al Hilal Bank, said: “We are very pleased with the exceptional investor response to Al Hilal Bank's second issuance in the debt capital markets and first capital-eligible offering.
"The strong investor interest resulted in the transaction achieving a $4.5 billion orderbook representing more than nine times the offered amount. The transaction is further testimony to the confidence that international investors continue to have in the strength of Al Hilal Bank’s credit.” - TradeArabia News Service
