Dubai makes a comeback with the first sovereign Sukuk of 2013 (By IFN)

Dubai makes a comeback with the first sovereign Sukuk of 2013

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UAE: The government of Dubai via its department of finance, has successfully issued a dual-tranche bond with a Sukuk feature, worth US$1.25 billion. The 10-year Sukuk and 30-year conventional notes were priced at a profit rate of 3.875% and 5.25% respectively; reflecting the high levels of liquidity and an improving risk perception on the emirate. The issuance which was 12 times oversubscribed, came on the back of Sheikh Mohammed Rashid Al Maktoum, the vice president and prime minister of the UAE, and ruler of Dubai’s announcement to make the emirate an Islamic finance hub; on par with market juggernauts such as Malaysia and Saudi Arabia, as well as up and coming jurisdictions such as Qatar. Dubai Islamic Bank, Emirates NBD, HSBC, the National Bank of Abu Dhabi and Standard Chartered Bank were the joint lead managers and bookrunners for the Sukuk; while Al Hilal Bank, Barwa Bank, Commercial Bank International, the IDB and Sharjah Islamic Bank were the co-lead managers for the issuance. Overall, the Sukuk feature attracted over 340 orders exceeding US$11 billion; comprising investors from Asia, the Middle East, Europe and the US as well as high quality fixed-income investors, fund managers, insurance companies, development organizations, sovereign wealth funds and international banks. “The transaction is a resounding success and has set the tone for upcoming issuances from the region. With a high quality order book of approximately US$15 billion and the fact that the government of Dubai was able to successfully print its first ever 30-year issue, this transaction is testimony of global investor confidence in the Dubai credit story and its long-term value proposition,” said Salman Ansari, regional head of debt capital markets, MENA and Pakistan, for Standard Chartered Bank.