QIIB’s $500m Sukuk oversubscribed by more than six times

QIIB has announced the successful issuance of $500m Sukuk under the Bank’s Sukuk programme of $2.0bn.

The offering was oversubscribed six times with investors bidding for more than six times the amount offered, reflecting the positive outlook of the Qatari economy and the strength of its financial position.

The issue was arranged and offered through a syndicate comprising of QNB Capital, Al-Khalij Commercial Bank (Al Khaliji), Barwa Bank, Boubyan Bank, Barclays Bank, MayBank and Standard Chartered Bank.

The offering was oversubscribed by investors, mostly from outside the Middle East, with a total of $3.3bn. The issue was priced at a spread of 175 basis points over the 5-year mid swaps carrying fixed coupon of 4.264 percent per annum. The participation included investors from around the world with 30 percent from the MENA and 70 percent to other investors from Europe, Asia and other countries.

“The Bank’s success in issuing sukuk and securing good pricing is primarily due to the strength and high rating of the Qatari economy, which is considered one of the highest credit ratings in the entire region,” said Dr. Abdulbasit Ahmad Al-Shaibei, QIIB Chief Executive Officer.

“All indicators and market researches place the Qatari economy at the forefront of the economies in the region. The Qatari banking sector enjoys the confidence of investors because it provides a very high solvency and is in a strong financial position. This is in addition to the strength of the Qatari economy, thanks to the prudent policies being pursued by the Qatari financial sector,” he said.

“The strong appetite of investors from MENA ,Asia and Europe, some of whom are dealing with sukuks for the very first time, reflects the strong financial position of QIIB and the continued strong support and confidence of both international and local investors in the Bank’s strong fundamentals and its ability to design and launch high quality products at competitive prices.”

“Despite the abundance of liquidity in the Qatari banking sector, sukuk issuance is vital because it enhances our presence in the international financial markets and opens new horizons with investors outside the region, especially those who do not deal with the Qatari market,” he said.

“The launch of the QIIB sukuk and the huge turnout of investors we have seen is further evidence of the failure of attempts being made to stifle the Qatari economy through an unjustified blockade. It clearly underscores the resilience of the Qatari economy,” Dr Al Shaibei emphasised. This issuance is the second such experience for QIIB, as the bank succeeded in issuing sukuk worth $700m in 2012.

Source from: The Peninsula