Robust Investor Appetite Marks Emirates Islamic’s Return to International Market with US$500m Benchmark Sukuk Wakala Offering as GCC Banks’ Post-pandemic Recovery Continues

Emirates Islamic Bank (EIB), one of the leading Islamic financial institutions in the UAE, successfully closed the issuance of its latest Sukuk offering – a benchmark US$500 million 5-year Sukuk Wakala on 14 November 2021.

EIB is 99.9% owned by Emirates NBD Group and indirectly owned by the Government of Dubai (via ICD, the Investment Corporation of Dubai). It is the third largest Islamic bank in the UAE in terms of assets after Dubai Islamic Bank and Abu Dhabi Islamic Bank.

The Sukuk was issued by its wholly-owned Cayman Islands-incorporated special purpose vehicle, EI Sukuk Company Limited, which is also the trustee, under the Bank’s US$2.5 billion Certificate Issuance Programme established on 19 October 2021. The Obligor to the transaction is EIB and the Programme was arranged by EIB and Standard Chartered Bank.
EIB had mandated Emirates NBD Capital and Standard Chartered Bank to act as Global Coordinators to the transaction. They were joined by Abu Dhabi Islamic Bank; Bank ABC; Dubai Islamic Bank; HSBC; The Islamic Corporation for the Development of the Private Sector (ICD), the private sector funding arm of the Islamic Development Bank (IsDB) Group; and KFH Capital Investment Company as Joint Lead Managers and Joint Bookrunners. Kuwait International Bank acted as Co-Manager.
The banks were also mandated to arrange a series of virtual calls with investors in the Middle East, Asia, Europe and Offshore US accounts.

EIB disclosed that the issuance, rated A+ by Fitch Ratings and maturing on 13 November 2026, attracted strong investor appetite which resulted in an order book that peaked at USD$1.2 billion, which was 2.4 times oversubscribed of the issuance size. This strong demand, from a global investor base, enabled the bank to tighten the spread on the Sukuk by 25 basis points from initial guidance, resulting in a profit rate of 2.082% per annum.
This pricing, added EIB, represented “the lowest spread ever paid by a UAE bank since 2008 for a US$ benchmark public debt issuance, further reiterating the Bank’s strong appeal to investors. The transaction reopened the debt capital markets for regional issuers following a period of volatility, demonstrating a strong leadership from Emirates Islamic.”
According to Salah Amin, Chief Executive Officer, EIB, “the oversubscription and tight pricing of the issue demonstrates the strong investor confidence in our financials and growth outlook as well as the favourable outlook for the UAE economy. The response from regional and global investors has been tremendous and we see this as a positive endorsement of the Bank’s credit strength and investor proposition.”
The proceeds from the issuance will be used for general balance sheet purposes including the Bank’s financing operations.
EIB is a regular issuer of Sukuk having entered the market in 2012 followed by regular multiple issuances in 2014, 2016, 2018 and 2020. EIB last went to the international markets in September 2020 with a similar US$500 million 5-year Sukuk Wakala, which matures on 23 September 2025, and which was priced at a fixed profit rate of 1.827% per annum.

The Sukuk certificates of this latest offering, are listed on NASDAQ Dubai and Euronext Dublin’s Regulated Market. The listing on Nasdaq Dubai took place on 2 November 2021.

At the bell ringing ceremony, Salah Mohammed Amin, CEO of EIB, stressed that the bank is encouraged “with the regional and international investors’ strong appetite towards our issuances as a clear indication of their deep confidence in the bank’s sound fundamentals, growth strategy and ability to reinforce and sustain growth. This issuance will further support Emirates Islamic’s business expansion plans and growth agenda as we seek to continue to be an active contributor towards UAE’s economic growth.”

Hamed Ali, CEO of Nasdaq Dubai and DFM, welcomed the EIB listing “as part of the Bourse’s active role to support leading issuers from the UAE and beyond. We are committed to further expanding our services in line with the requirements of issuers and investors enabling issuers to raise necessary funds to implement growth strategies as well as to diversify investment opportunities.”

The total value of EIB Sukuk issuances on Nasdaq Dubai amounts to US$1 billion through two issuances. The total value of Sukuk listed on Nasdaq Dubai at mid-November 2021, according to the Bourse, amounted to US$80.5 billion.
EIB has weathered the impact of the COVID-19 pandemic as recovery continues in 2021. The bank reported interim operating income of AED1,179.7 million for FH2021 compared with AED1,140.0 million for FH2020. Net profits for the same period increased substantially from AED11.8 million in 2020 to AED568.7 million in 2021.

Similarly total assets for FH2021 amounted to AED68,041.4 million compared with AED70,571.3 million for the whole of 2020. This trend was the same in customer deposits at AED55,112.2 in FH20231 compared with AED54,692.0 million for FY2020.

Share this post