21-10-2020
Qatar Islamic Bank (QIB), rated A1 / A- / A (all stable) by Moody's, Standard & Poor's and Fitch, respectively, announced that it has successfully completed issuance of 5-year Sukuk worth $ 750 million at an average rate profit of 1.95% per annum, which equates to a credit margin of 155 basis points above the prices average of fixed and variable rate swap for 5 years. This issuance was implemented under the program of Qatar Islamic Bank (QIB) to issue Sukuk in US dollars with a total value of 4 billion US dollars and listed on the Euronext Dublin. The profit rate reached by completing this issuance is the lowest rate ever paid by the bank on its issues of fixed rate Sukuk. This is the bank's second public issuance in 2020, after it issued the first Formosa Sukuk earlier this year.
The success of this deal has been a result of a two-day marketing strategy that aimed to inform international and regional investors of the bank's strategy and financial performance. Prior to the Sukuk launch, the bank’s management team made a call with international investors and several individual calls with institutional investors from Asia and Europe. The investors were encouraged by the bank's strong credit fundamentals and sound business strategy.
Basil Jamal, Chief Executive Officer of the QIB Group commented, “We are pleased with the success of this issuance, which confirms the confidence that investors place in Qatar, the Bank’s Board of Directors and its management team, and its strategic orientation. We are proud to be able to reach a diversified base of international investors, allowing us to implement our financing strategy in a timely and cost-effective manner. Capital markets remain important to us and we value investor’s trust in our brand.
The demand of investors was strong, and the subscription application register reached $ 2.2 billion (representing 2.9 times the value of the subscription) from about 100 investors. In terms of the investors’ qualitative classification, it was as follows: 40% banks, 31% asset managers, 8% private banks and 21% sovereign bodies. More importantly, the investors’ base diversified geographically, with 44% of the Sukuk allocated to the Middle East, 24% to Asia, 17% to Europe, and 15% to other countries.
Both Qinvest and Standard Chartered Bank acted as joint coordinators for the deal at the international level. City, Credit Agricole, Dukhan Bank, HSBC, Qinvest, QNB Capital and Standard Chartered Bank also served as lead managers and subscription managers, in addition to Warba Bank as a co-director.