Gulf banks seal refinancing trades
Two Gulf banks breezed through the US dollar primary market on Tuesday, one issuing sukuk, the other in conventional format as they issued bonds to refinance upcoming maturities.
Emirates Islamic Bank and Qatari lender Ahli Bank both adopted a two-day execution process, launching their deals ahead of the latest FOMC meeting, which ends on Wednesday.
EIB launched a US$750m five-year sukuk offering at 95bp over Treasuries, following IPTs of 125bp area. Books were over US$1.6bn.
The final yield of 5.059% was the lowest yet this year for a FIG issuer from the GCC region.
"Emirates Islamic Bank is well-liked by investors, including international investors. Add a sukuk on top of that and it's a winning combination," said a lead banker.
It last issued US dollars in May, when it printed a US$750m five-year sustainability sukuk transaction. That note was quoted at a G-spread of 85bp pre-announcement, according to LSEG. The banker said the new issue priced in line with fair value.
The bank, rated A+ by Fitch, has dollar sukuk coming due this year and next, of US$500m each. It is 99.9% owned by Emirates NBD.
Dubai Islamic Bank, Emirates NBD Capital, HSBC, Mashreq, Sharjah Islamic Bank and Standard Chartered were the lead managers.
Ahli Bank, which is 47.71% owned by Qatar Investment Authority and its wholly owned subsidiaries, printed a US$500m no-grow five-year conventional bond at 105bp over Treasuries from IPTs of plus 135bp–140bp.
Other Qatari banks have bonds trading in a range of 80bp to 105bp, according to the leads.
Books were over US$2bn.
The bank, rated A2 by Moody’s and A by Fitch, last issued nearly four years ago, according to IFR data, when it sold a US$500m July 2026 note. It has a US$500m bond, issued in 2020, due in September.
That scarcity value – and the relative lack of Qatari financial paper in general – helped attract demand, said the banker.
Barclays and QNB Capital were the global coordinators. They were also bookrunners along with Deutsche Bank, JP Morgan, Mizuho and Standard Chartered.
Updates final books on Ahli Bank