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18 July 2024

Emirates NBD arranges Al Rajhi’s $1 billion inaugural Sukuk

Published
By WAM

Emirates NBD has successfully priced a US$1 billion Senior Unsecured Sustainable Sukuk for Al Rajhi Bank, the world’s largest Islamic bank by assets and market capitalisation.

The five-year Sukuk which was priced at a reoffer yield of 4.774 percent generated strong demand, attracting orders of over US$3.75 billion. The robust order book allowed Al Rajhi to tighten the pricing by 40 basis points to 5-year US Treasury + 110 basis points (bps) from an initial price guidance of 150 bps.

The Sukuk was strongly anchored by Middle Eastern investors, who accounted for 49 percent of the allocation. The issue also witnessed strong demand from high quality international investors.

The Sukuk was issued under Al Rajhi’s US$4 billion Trust Certificates Programme, which was established in April 2022. The proceeds will be used to finance and refinance, in whole or in part, Eligible Sustainable Projects, as set out in the Bank’s Sustainable Finance Framework.

The issue represents the first debt capital market transaction by a financial institution in Central and Eastern Europe, Middle East and Africa following the recent volatility in the global banking sector.

Waleed Almogbel, Managing Director and CEO of Al Rajhi Bank, expressed gratitude for the support of local and international investors during the marketing process, citing the success of the Sukuk as a reflection of their confidence in the bank and the Kingdom's solid foundations.

Almogbel also emphasised the bank's commitment to sustainable financing and expressed enthusiasm for the upcoming annual Allocation and Impact report, which will detail the environmental and social benefits created by the Sukuk transaction.

Mohammad Al Bastaki, CEO of Emirates NBD Capital, affirmed the bank's commitment to providing dynamic sustainable financing solutions to meet increasing demand from regional and global clients. The success of Al Rajhi Bank's debut Sukuk is a testament to the confidence of investors in the bank and the growing demand for sustainable financing solutions.