Chief Investment Banking Officer of KFH Capital, investment arm of KFH Group “KFH”, Mr. Abdullah Al-Haddad said that KFH Capital has succeeded in arranging the issuance of US$ 1 Billion Sukuk for Dubai Islamic Bank. As one of the lead arranger, KFH arranged the sukuk issuance of Dubai Islamic Bank’s US$ 5 Billion Sukuk program. This step has reiterates KFH Group’s pioneering role in the Sukuk market, and establishes sukuk as a vital source of finance for governments and companies.
Al-Haddad indicated in a press release that KFH Capital has arranged the Sukuk transaction in cooperation with 7 Global Banks. This issuance is expected to be rated at A3 by Moody’s and A by Fitch. The Sukuk tenor will be 5 years with a return of 3.625%. The sukuk is based on the Wakala structure and shall be listed on the Irish Stock Exchange and NASDAQ Dubai. Issuance was priced at 115 bps above the five year benchmark rate. Issuance marketing started at 130 bps levels and narrowed to 115bps as the order book started building up. Subscription to the issuance was approximately US$ 1.75 Billion, i.e. an increase by 75% over the issuance amount with orders from more than 115 investors, mainly from the Middle East. The tremendous demand on this sukuk issuance reflects great trust investors place in Dubai Islamic Bank, and KFH Capital’s capabilities to manage the issuance process. It also reflects investors’ interest in Sukuk in general and GCC Sukuk in particular.