Qatar Islamic Bank issues $750mn sukuk

The profit rate was equivalent to a credit spread of 100 basis points over the US treasury rate, which was 15 basis points inside QIB’s fair value and lower than secondary market spreads of all Qatari banks, reflecting the positive perception of international investors about the overall strength of Qatar’s economy and QIB’s credit quality

Qatar Islamic Bank (QIB) “successfully” issued a $750mn sukuk with a profit rate of 4.485% and tenor of five years.

The profit rate was equivalent to a credit spread of 100 basis points over the US treasury rate, which was 15 basis points inside QIB’s fair value and lower than secondary market spreads of all Qatari banks, reflecting the positive perception of international investors about the overall strength of Qatar’s economy and QIB’s credit quality.

Moreover, QIB’s profit rate was the lowest achieved by a GCC bank for a senior unsecured 5 year issuance in 2024.

QIB announced its intention to issue a sukuk on Monday morning and conducted calls throughout the day with European, Asian and US fund managers. Initial investor feedback was encouraging and allowed QIB to open the order book on Tuesday morning.

The order book quickly grew to peak at $2.2bn, representing an oversubscription rate of three times, one of the highest levels of demand seen for sukuk issuances.

The robust order book enabled QIB to confidently tighten pricing by 30 basis points in one iteration to 100 basis points over the US treasury rate from “Initial Price Thoughts” of 130 basis points. Investor diversity was broad and comprised banks, private banks, fund managers and agencies from all over the world.

QIB Group Chief Executive Officer Bassel Gamal said, “QIB is pleased with its successful return to the international capital markets. Our deal showcases the large and diversified investor following that the State of Qatar enjoys and also highlights the confidence placed by international and regional investors in the bank. We are proud of the exceptional investor demand received and confidence placed in our business.”

Acting as joint lead managers and bookrunners were Bank ABC, Dukhan Bank, Emirates NBD Capital, HSBC, KFH Capital, Mashreq, Mizuho, QNB Capital, Q Invest, Standard Chartered Bank and The Islamic Corporation for the Development of the Private Sector.