Qatar Islamic Bank returns to global debt market; $500mln sukuk oversubscribed 6.6 times
The bank’s five-year sukuk, which carries a profit rate of 5.581%, equivalent to 115 basis points (bps) over the benchmark US treasury rate, shows international investors’ confidence in the bank and in Qatar’s economy.
QIB effectively reopened the international market for other Qatari entities, being the first bank issuer from Qatar to access the dollar market via a public issue since July 2021.
The transaction was met with strong demand, culminating an orderbook size in excess of $3.3bn from more than 160 regional and international investors.
The oversubscription rate represents the highest orderbook for a senior sukuk since June 2020.
The strong investor appetite for the sukuk allowed QIB to tighten pricing to 115bps over the benchmark rate from initial price thoughts of 155bps, a move of 40bps, which is rarely seen in the market and is reflective of the strength and quality of the orderbook, said a spokesman of QIB.
The final pricing level of US Treasury Rate +115bps is substantially lower than where all Qatari banks papers is currently trading in the secondary market.
In addition, 53% of the sukuk was placed outside the GCC (Gulf Cooperation Council) region with UK/European, Asian, US offshore and supranational investors, marking another notable distinction on the deal.
“QIB is very pleased with its successful return to the international capital markets. Our deal highlights the confidence placed by international and regional investors in the bank’s strategy and credit story and also showcases the large and broad investor following that Qatar enjoys,” its chief executive officer Bassel Gamal said.
Highlighting that it is the first Qatari bank to access the US dollar public market in over two years, he said “the exceptional investor demand helped us achieve a record over-subscription and enabled us to price the deal inside our curve.”
QIB is rated ‘A1’ by Moody’s and ‘A-‘ by Fitch. The sukuk was issued as a drawdown under QIB’s $5bn Trust Certificate Issuance Programme and will be listed on Euronext Dublin.
HSBC and Standard Chartered Bank acted as joint global coordinators along with Bank ABC, Dukhan Bank, KFH Capital, MUFG, QInvest, QNB Capital, SMBC Nikko, The Islamic Corporation for the Development of the Private Sector as joint bookrunners and joint lead managers.
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