Kuwait-based Warba Bank was mandated by Garuda Indonesia, Indonesia’s flagship carrier, as Joint Lead Manager and Joint Book Runner for its inaugural international Sukuk issue.

The international offering followed a comprehensive global roadshow conducted in Abu Dhabi, Dubai, Singapore, Hong Kong, Zurich and London.

On May 27, PT Garuda Indonesia (Persero) Tbk priced a $500 million five-year Sukuk offering with a coupon of 5.95 per cent. Subscription diversified by geography, 56 per cent of the deal was allocated to the Middle East, followed by 32 per cent to Asia and the remaining 12 per cent to investors in Europe.

By investor type, banks/agencies took the bulk of the offering at 52 per cent while private banks/corporates and fund managers were allocated 29 per cent and 19 per cent respectively. Participation in this offering far exceeded all expectations with coverage of 350 per cent amounting about $1.8 billion.

Due to its strong track record in corporate financing and its distinguished business relationship with Garuda, Warba Bank was selected to help enhance the carrier’s presence in key international markets and assess stakeholder interest in a potential Sukuk issue.

The offering has been structured as a Wakala Sukuk based on rights of asset travel using Special Purpose Vehicle “SPV”, where Garuda Indonesia Global Sukuk Limited will act as the issuer.

This is the first non-sovereign US dollar Sukuk out of Indonesia – paving the way for other Indonesian state-owned enterprises (SOEs) and corporates to tap this market.

Shaheen Hamad Al Ghanim, Warba Bank deputy CEO – Investment & Treasury, said: “To be lead manager of Garuda Indonesia’s inaugural Sukuk issuance is an important milestone for Warba Bank and is testimony to our competence in handling such an important and unique deals. The Sukuk, which is Indonesia’s first corporate global Sukuk issuance, further demonstrates the global demand for Islamic Finance products. Our activity in corporate finance complements Warba Bank’s ever expanding retail banking offering and together is a key driver in our strategy to achieve sustainable growth.”

Warba Bank excels in providing corporate financing services in key markets, and will continue to do so by leading, securing and executing innovative Sharia-compliant investments which attain strong returns in both short and long term. – TradeArabia News Service