Robust Demand for Trust Certificates of Yet Another Debutante Issuer Ajman Bank’s Successful Offering of Maiden USD500mn Benchmark Sukuk Ijara
Another debutante, another benchmark Sukuk transaction. This time it is Ajman Bank, the first Islamic bank incorporated and headquartered in the Emirate of Ajman, which successfully priced a US$500mn 5-year Sukuk at a credit spread of 130 basis points over US Treasuries, which equates to a fixed profit rate of 5.125% per annum.
The Sukuk certificates were issued by Ajman Senior Sukuk Ltd. (Cayman Islands Incorporated) on behalf of the Obligor, Ajman Bank, under its USD1.5bn Trust Certificates Issuance Programme. Proceeds from the offering will be used to fund general corporate and balance sheet purposes.
Ajman Bank had earlier mandated Standard Chartered Bank, Emirates NBD Capital, First Abu Dhabi Bank and J.P. Morgan to act as the Joint Global Coordinators on the transaction, and together with Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Bank ABC, Citi, Dubai Islamic Bank, KFH Capital, Mashreq, QNB Capital, Sharjah Islamic Bank, The Islamic Corporation for the Development of the Private Sector, the private sector arm of the Islamic Development Bank (IsDB) Group, and Warba Bank to act as Joint Lead Managers and Bookrunners. They were also mandated to arrange a series of investor calls and roadshows with accounts in the UK, EU, the MENA region, Asia and Offshore US for a benchmark US dollar-denominated Sukuk Wakala offering. The result was a USD500mn fixed rate senior unsecured RegS offering with a tenor of five years maturing in April 2030.
Given this transaction marked Ajman Bank’s debut in the international capital markets, the Bank conducted an extensive marketing exercise by meeting with investors in Hong Kong, Singapore, Malaysia, London and the UAE. During the investor meetings, the Bank communicated its new and revamped business strategy, which is aimed at an improved financial performance and would position the bank for future growth in the UAE’s vibrant economy.
The Bank had set the Initial Price Thoughts (IPTs) at US Treasuries plus 165 basis points which were released to the market on the morning of 23 April 2025, with the final pricing of US Treasuries plus 130 basis points released by midday London time. The 35 basis points price tightening, and the ability to lower pricing in one iteration, says Ajman Bank, reflected the high quality of the orderbook which comprised some of the world’s largest fund managers, banks, pension fund and insurance companies.
The transaction, according to the Bank, garnered a high-quality orderbook peaking at over US$2.7bn, representing a 5.4x oversubscription rate, with participation from 100+ investors. The transaction represents the Bank’s first Sukuk issuance ever, marking a milestone in the bank’s capital markets journey and allowing it to further diversify its funding platform.
The transaction attracted demand from some of the largest international and regional institutional investors, allowing the Bank to achieve an extensive geographic diversification with 35% allocated to international investors and 65% of the size allocated to regional investors.
Mustafa Al Khalfawi, Ajman Bank’s Chief Executive Officer, commented, “We are pleased with the success of our inaugural Sukuk issuance and the strong response from investors which highlights the confidence placed by international and regional investors in Ajman Bank, the growing prominence of the Emirate of Ajman and the robustness of the broader UAE economy. Investors welcomed Ajman Bank’s ambitious growth strategy, its firm commitment to enhancing asset quality, and appreciated the opportunity to engage with a new name in the market. Additionally, they expressed their comfort and positive views on the UAE’s operating environment and robust economy.”
Ajman Bank took a bold initiative by opportunistically accessing the market despite prevailing uncertainty stemming from the impact of trade tariffs imposed by the United States earlier this month. The Bank announced its intention to issue a debut Sukuk on Tuesday morning and conducted calls throughout the day with European, Asian and US fund managers. On the back of positive investor feedback, the team decided to accelerate execution and close the transaction on Wednesday.
The standout feature of the debut and regular Sukuk offerings over the last few months is that of robust subscription support from its safe haven national and regional investors, which has resulted in 60% plus subscriptions especially from the Gulf Cooperation council (GCC) investors.
Ajman Bank is rated BBB+ by Fitch Ratings with a stable outlook. The Sukuk certificates carry the same rating of BBB+ by Fitch Ratings and were admitted for listing and trading on the London Stock Exchange’s International Securities Markets and Nasdaq Dubai.