Sharjah Islamic Bank (SIB) marked its debut in global Sukuk as it closes successfully at US $225 million. It is the first rated Sukuk issued by a GCC institution and structured as a floating rate note set to mature in five years' time.
“This is a historic deal for SIB that clearly indicates the strength of our position in the UAE banking sector and our commitment to structuring Shariáh-compliant transactions. We are looking forward to this deal as our initial step into global expansions,” said SIB Chief Executive Officer Hussain Al Qemzi.
HSBC acted as the Lead Manager as well as sole Bookrunner for the issue. The Co-Managers for the transaction were European Islamic Investment Bank, Kuwait Finance House Group and Mashreq Bank.
The Sukuk attracted 41% demand from investors from Europe and Asia while the remaining 59% by the Middle Eastern investors. Prominent global and regional banks took 84% of the sukuk issue while fund managers got a 16%. The combination of these factors enabled the Sukuk to be priced at LIBOR plus 65 bps, setting a new benchmark pricing for SIB.
Sukuk, the Islamic version of conventional debt capital market instrument, which started in recent years, has continued to grow in the global market, running into hundreds of billions of dollars of financial products.
Islamic banking offers many services parallel to conventional banking which includes leasing, equity investments, funds, private equity, venture capital, unit trusts, bonds and hire purchase. “The demand for Islamic financial instruments is evidently increasing and we aim to offer the best services to the Islamic community. SIB has been innovative and successful in many aspects and we therefore enjoy the stature that we hold today,” concluded Al Qemzi.
© 2006 Al Bawaba (www.albawaba.com)
