$400m ABG Sukuk issue over subscribed

Manama : Al Baraka Banking Group (ABG), the Bahrain-based leading Islamic banking group, has successfully completed its US$400 million first Islamic Sukuk issue.

The issue was well-received in the GCC, Asian and European markets, and was five times oversubscribed, receiving subscriptions of US$ 1.6 billion against the initial requirement of US$ 300 million. As a result of the high subscription, it was decided to raise the issue size from US$ 300 million to US$ 400 million. The Sukuk issue is an Additional Tier 1 Perpetual Sukuk that is compliant with Basel III as per the Central Bank of Bahrain rules. 

The Sukuk structure is a Sharia compliant Mudaraba, with a profit rate for an initial 5-year term set at an expected return of 7.875% p.a., with 5 year resets thereafter. The issue will be listed on the Irish Stock Exchange plc.

Standard Chartered Bank was appointed as the Global Coordinator and the Joint Lead Manager syndicate comprised of Bank ABC, Dubai Islamic Bank PJSC, Emirates NBD Capital, KFH Capital, Noor Bank, QInvest and Standard

Chartered Bank

Commenting on this transaction, Adnan Ahmed Yousif, Member of the Board of Directors and President and Chief Executive of Al Baraka Banking Group, said: “As part of our strategy to expand our capital base, to grow in our existing and new markets and to strengthen the business of our banking units, we successfully completed the first Sukuk issuance of Al Baraka Banking Group, which is the first ever Tier 1 Sukuk issuance from the Kingdom and the first of its kind in terms of size to be issued by a private sector institution from Bahrain. This confirms the strong banking and finance reputation and the prestigious position of the Bahrain Financial Center as well as the confidence international markets have in it.”

He added: “All indicators confirm once again the prestigious position and outstanding reputation of Al Baraka Banking Group in regional and global financial markets as a result of its strong track record, its strong financial, technical and human resources, and its broad geographic network.”

Adnan Ahmed Yousif thanked the supervisory authorities in the Kingdom of Bahrain, in particular the Central Bank of Bahrain, as well as the global coordinator of the issue, Standard Chartered Bank, the Joint Lead Managers’ syndicate and all institutions, banks and investors who participated in the subscription.

Al Baraka Banking Group (B.S.C) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain, listed on Bahrain Bourse and Nasdaq Dubai stock exchanges. It is a leading international Islamic banking group providing its unique services in countries with a population totaling around one billion. It is jointly rated BBB+ (long term) / A3 (short term) on the international scale and A+ (bh) (long term) / A2 (bh) (short term) on the national by Islamic International Rating Agency and Dagong Global Credit Rating Company Limited, and by Standard and Poor’s at BB+ (long term) / B (short term).

Al Baraka offers retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari’a. The authorized capital of Al Baraka is US$ 1.5 billion, while total equity is at about US$ 2 billion. The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in fifteen countries, which in turn provide their services through over 700 branches.