The Ras Al Khaimah Government yesterday completed the formal documentation signing for its landmark $400 million (Dh14.69 billion) sukuk issue, with Standard Chartered Bank, BNP Paribas and Liquidity House acting as joint bookrunners.
This issuance is both the first US dollar sukuk issued by a sovereign under a programme and by an emirate in the UAE.
This is the second issuance under the government's $2bn sukuk programme. The first issuance was a Dh1bn sukuk issue in May 2008 in which Standard Chartered Bank acted as a sole arranger and bookrunner.
At the signing ceremony, Sheikh Saud bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al-Khaimah, said: "We are extremely pleased with the strong investor response to the sukuk issue which serves as an indication of the Ras Al Khaimah Government's continued credibility with the international investor community. I would like to thank both Standard Chartered Bank and BNP Paribas for the integral role they played towards the success of this well-distributed issue which will establish a liquid benchmark for the government in the US dollar markets."
The timing of the government's second foray into the international capital markets was critical. It took place against the back-drop of positive investor sentiments towards high-grade government issuers and a scarcity of US dollar sukuk paper in the global capital markets.
Shayne Nelson, Regional Chief Executive, Standard Chartered Mena, said: "The Government of Ras Al Khaimah has a strong strategic vision and plan for their esteemed emirate and the success of this sukuk issuance reaffirms the government's leadership, commitment and capabilities. The sukuk is a key milestone not only in the continued development of Ras Al Khaimah but also in the evolution of Islamic banking.
The roadshow began on July 6 in the Middle East and ended on July 10 in Europe. The government's credit story was effectively communicated in all key financial centres, and the successful marketing efforts generated broad global investor understanding of the government's credit story and its strategic importance to the UAE.
Based on the strong investor response received during the roadshows, the government announced its intentions for a second issuance under its sukuk programme, releasing a price whisper in the 8–8.5 per cent area for a five-year issuance on July 14. This was followed by the release of official price guidance of 8–8.25 per cent for a target issue size of $300m to $500m on July 14.
The order book grew rapidly to more than $1.65bn with more than 120 investors, despite being open for only 24 hours in the Middle East and Asia and only six hours in Europe. The transaction received strong interest from investors across the markets, with final allocations of Middle East 47 per cent, Asia 34 per cent and Europe 19 per cent.
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