ADIB’s $750m Sukuk sees highest GCC bank oversubscription since 2013

It’s the highest oversubscriptions seen on a GCC bank AT1 issuance since 2013.

ADIB priced the perpetual non-call, five-and-half-year sukuk at a profit rate of 7.25 percent per annum, payable semi-annually.

The exceptional demand saw the final pricing 62.5 bps tighter than the initial pricing thoughts. Additionally, the reset spread is 306 bps over US treasury yields, which is 121 bps lower than the previous AT1 sukuk issued by ADIB in 2018.

The new sukuk will be listed and traded on London Stock Exchange.

ADIB’s sukuk: Exceptional investor interest

Nasser Al Awadhi, ADIB Group Chief Executive Officer, said: “We are delighted to receive exceptional interest from a broad range of domestic, regional and international investors. Demand for this issuance exceeded the initial offer by more than nine times, highlighting the tremendous demand and confidence from global investors in ADIB’s asset quality.

“We are also pleased to see this strong international demand continue as the final pricing tightened. The sukuk issuance will maintain the group’s optimised capital structure and its strong CET1 position.

“The overall success of this raise can be attributed to ADIB’s clear ESG framework and our strong track record of both growing market share and delivering sustainable returns.”

The diverse demand for the issuance is evident by final allocations of 83 percent to MENA investors, 13 percent to Europe and 4 percent to Asia. It saw participation by private banks (70 percent), Asset and Fund managers (16 percent), commercial banks (10 percent) and others (4 percent).

The islamic bank’s tier-one perpetual sukuk was structured to comply with the internationally agreed Basel III regulatory framework, which includes detailed criteria for capital and liquidity. The Abu Dhabi bank is rated A2 by Moody’s and A+ by Fitch, in each case with a stable outlook.