Ajman Bank, the pioneering Islamic financial institution based in Ajman, has successfully priced its inaugural Sukuk issuance, raising $500 million with a maturity of five years. The Sukuk was priced at a credit spread of 130 basis points above the U.S. Treasury rate, leading to a fixed profit rate of 5.125% annually. This transaction saw strong interest, culminating in an orderbook that peaked at over $2.7 billion, reflecting an oversubscription rate of 5.4 times, with participation from more than 100 investors. This marks a significant milestone for Ajman Bank as it ventures into the capital markets and diversifies its funding sources.
To promote this debut issuance, Ajman Bank undertook an extensive marketing campaign, engaging with investors in key financial hubs such as Hong Kong, Singapore, Malaysia, London, and the UAE. During these engagements, the bank presented its revitalized business strategy, aimed at enhancing financial performance and positioning itself for future growth within the thriving UAE economy.
The interest from investors included major international and regional institutional players, resulting in a distribution of 35% of the Sukuk allocated to international investors, while the remaining 65% was allotted to regional purchasers.
Mustafa Al Khalfawi, the Chief Executive Officer of Ajman Bank, expressed satisfaction with the success of the Sukuk issuance, noting the strong response from investors. He highlighted the confidence exhibited by both international and regional investors in Ajman Bank, and emphasized the burgeoning status of the Emirate of Ajman, as well as the resilience of the UAE’s broader economic landscape. He also acknowledged investor support for the bank’s ambitious growth agenda and its commitment to improving asset quality, alongside positive perceptions of the UAE’s economic environment.
Ajman Bank demonstrated strategic foresight by capitalizing on market opportunities despite uncertainties due to recent trade tariffs imposed by the United States. The bank announced its intention to launch the Sukuk on Tuesday morning and held discussions with fund managers from Europe, Asia, and the U.S. Throughout the day, bolstered by favorable investor feedback, the team decided to expedite the process and finalize the issuance by Wednesday.
Initial price guidance was set at U.S. treasuries plus 165 basis points on Wednesday morning, but was subsequently revised to U.S. treasuries plus 130 basis points by noon in London. This adjustment reflects a tightening of 35 basis points, indicative of the high-quality nature of the orderbook consisting of some of the largest global fund managers, banks, pension funds, and insurance companies.
Ajman Bank currently holds a BBB+ rating with a stable outlook from Fitch, which will also apply to the Sukuk. The issuance is set to be listed on both the London Stock Exchange’s International Securities Market and Nasdaq Dubai. The joint global coordinators for this transaction included Standard Chartered Bank, Emirates NBD Capital, and First Abu Dhabi Bank, with J.P. Morgan as a joint lead manager alongside several other financial institutions.